London coffee, cocoa and sugar slide

London coffee, cocoa and sugar futures fell on Friday on investor selling to book profits before the end of the quarter, encouraged by a softer commodities sector due to a stronger dollar and weaker oil. "We're seeing profit-taking and book-squaring before the end of the week," said a fund manager.
London May robusta finished down $61 or 2.5 percent to $2,298 a tonne in volume of 9,150 lots, with selling momentum picking up sharply in the afternoon. "Coffee (in London) went up late yesterday. We ran out of buying, and this set London back a little bit, and possibly some stops were hit," one dealer said.
The main harvest for robusta coffee beans has kicked off in Indonesia's Sumatra island, but sales are slow as buyers are waiting for prices to fall further and for better quality coffee beans.
Brazil's crop forecasts for soy and corn will likely be revised up from current numbers, but the next coffee crop forecast will not rise as much as the private sector is saying, the government's crop supply agency Conab said Thursday. London cocoa futures also fell on investor selling and profit-taking, and traders noted a lack of industry buying and producer selling to prop up prices.
July settled down 37 pounds or 2.7 percent to 1,317 pounds a tonne. A softening pound due to weak housing data gave some support as pound-denominated cocoa futures were cheaper.
"The weak pound has helped a little bit," a trader said. London white sugar futures also fell with selling accelerating as the dollar strengthened in the afternoon. May ended down $4.10 or 1.2 percent to $331 a tonne. After scaling a 19-month peak on the first trading day of March, sugar stumbled badly when the near collapse of Bear Stearns sparked a liquidation rush by investment funds out of the commodity sector. Sugar sank to an 11-week low.
The market is already looking towards the start of the harvest of the main centre-south cane crop in major grower Brazil. Analysts feel steep rallies in crude oil may lead producers to use more cane to manufacture ethanol biofuel. Mexico forecasts sugar production for the 2008/09 cycle will be up 3.6 percent year-on-year from the expected result of the current cane harvest, the agriculture ministry said on Thursday.