London robusta coffee, cocoa, and white sugar futures all sagged on Monday on investor and fund selling, pressured by a firm US dollar, traders said. The dollar's weakness early in the session initially helped underpin London soft commodities in thin trade, but as the dollar rose, investor and fund sales dragged dollar-denominated coffee and sugar lower.
London cocoa, which is traded in pounds, fell to a two-week low in sympathy with New York cocoa, which tumbled nearly 4 percent on a firm dollar, arbitrage selling and sell-stops.
The dollar rose on Monday, rebounding from a 2-1/2 week low against the euro as equities rallied and an economic forecasting gauge showed the US economy, while weak, has so far managed to avoid recession.
"We've come off quite a bit from early in the day because the dollar turned and as it was moving up there was less incentive to buy because you're going to get less for your money," one London-based softs trader said.
London cocoa dropped from early highs at midday in a flurry of investor and fund selling but later recovered to close modestly lower on arbitrage buying, traders said.
July closed down 27 pounds or 1.8 percent at 1,440 pounds per tonne in a moderate volume of 5,367 lots. September cocoa fell 19 pounds or 1.3 percent to 1,400 pounds per tonne, with 2,317 lots traded.
July's premium to September eased at midday from around 50 pounds late last week but expanded again late in the session and remained well above the 18 pound level seen during a sharp sell-off early last week.
July has been underpinned by concern about tight supplies of tenderable cocoa as the West African mid-crop was believed to be large but of poor quality, traders said.
Cocoa arrivals at ports in top grower Ivory Coast were around 1,129,000 tonnes from October 1 to May 18, exporters estimated on Monday, though arrivals were seen falling from one week to another in a variable mid crop.
Ghana's 2007/08 cocoa main crop is forecast at 634,000 tonnes, up by 8 percent from last season and higher than a previous 600,000-tonne projection by industry regulator Cocobod, the central bank chief said on Monday. Robusta coffee futures were firm at midday but drifted lower in afternoon dealings on light investor and fund selling encouraged by a firmer US dollar.
Benchmark July robusta settled down $19 or 0.8 percent at $2,261 per tonne in a moderate volume of 6,978 lots. July has held in a range between $2,100 and $2,400 per tonne since mid-March.
London white sugar futures fell in late-afternoon trade on investor profit taking and fund selling weighed down by a firming dollar and overhanging pressure from abundant supplies, dealers said. Freight rates had started to climb again, restricting physical demand from importers, they added. "Everyone has got sugar," one dealer said. August white sugar ended down $4.20 or 1.3 percent at $329.20 per tonne in a moderate volume of 2,291 lots.
Comments
Comments are closed.