Soft commodity markets were mixed by the close Friday after a rally stoked by the falling dollar and record crude prices stalled, analysts said. Sterling Smith, an analyst for brokers FuturesOne in Chicago, said choppy dealings permeated the market going into the conclusion of trade.
Sugar values in New York surged over the 14-cent barrier in the key October contract at the height of the rally, but were beaten back in late business. But analysts said resurgent crude, disappointing yields in top grower Brazil, cuts in output by India, the prospect of more exports by Brazil of the alternate fuel ethanol and low US beet acreage should support sugar values going into next week. "Sugar is getting ready to do better," Smith said.
The key New York October raw sugar contract climbed 0.38 cent to finish at 13.99 cents per lb. But the London August white sugar contract eased $0.10 to settle Friday at $387.80 per tonne.
Cocoa futures finished easier, with London bean values faltering in part on disappointment over the latest European grind figures, which showed a modest, less-than-expected rise. Europe's cocoa grind was up 1.7 percent year-on-year in the second quarter at 328,920 tonnes, the Brussels-based European Cocoa Association (ECA) said on Friday.
The US second-quarter cocoa grind figures will be handed out on Thursday, July 17. Smith said that cocoa futures had managed a recovery at the end to wind up a volatile week. The benchmark New York September cocoa contract rose $2 to settle at $2,911 a tonne.
The September London cocoa contract fell 16 pounds to end at 1,540 pounds a tonne. Coffee futures, on the other hand, were inspired by the strong crude market to claw higher, dealers said.
"I think it is up on a slightly stronger New York (arabica futures) on the back of crude. It is outside influences again," a London-based robusta coffee dealer said. "I don't see anything that is coffee-related pushing it up."
The London September robusta contract rose $17 to finish at $2,331 a tonne. This was matched by the ICE September arabica contract, which went up 0.75 cent to finish at $1.4225 per lb. Some analysts sounded a note of caution, though, that the commodity boom story might falter.
Lars Steffensen, managing director of London-based commodities fund Ebullio Capital Management, said market speculation that the US government may take over mortgage finance firms Fannie Mae and Freddie Mac could force investors to funnel funds elsewhere. "We're at a knife's edge," he said. "You're seeing a lot of shifting into safe havens. It is a panic psychology."
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