Soft commodity futures moved sideways in light volumes on Friday, underpinned by a tightening supply outlook across the board. Coffee, cocoa and sugar were little changed in the afternoon, pressured by a weakening oil price and a recovery in the dollar. Dealers said shifts in crude prices were likely to set the direction for sugar until market participants returned en masse from their holidays.
Dealers kept an eye on the Reuters/Jefferies CRB Index, which eased in the afternoon after strong gains this week. Some London participants squared positions before a long weekend in the United Kingdom. Dealers saw producer selling kicking in if benchmark ICE October raw sugar futures rose to around 14.30 cents a lb.
ICE October futures were down 0.12 cent or 0.9 percent to 14.02 cents a lb at 1455 GMT. Merchant Sucden said in a daily market report: "With the market posting handsome gains for the week, it is possible we might see some late fund buying and a push for a close over 14.00 cents." London October was up 20 cents to $402.50 a tonne in slim volume of 1,073 lots.
Dealers said nearby supplies of the sweetener were plentiful, but availability was expected to tighten into next year. Fortis Commodity Derivatives said in a daily market report, "The fundamental sugar scenario for next year in theory should be bullish because of the perceived shortfall in the overall supply and demand stats."
London November robustas were up $3 to $2,307 a tonne in moderate turnover of 4,146 lots at 1440 GMT. ICE December arabicas were up 0.65 cent to $1.4430 a lb. Dealers said the fundamental market outlook signalled good supplies and steady demand, although availability of robustas was expected to tighten before the start of the Vietnamese main crop in October.
The benchmark London December cocoa contract traded down $5 to $1,568 per tonne in modest volume of 4,782 lots at 1441 GMT. ICE December was down $38 or 1.3 percent to $2,803 a tonne. Cocoa was underpinned by the International Cocoa Organisation's (ICCO) increase in its 2007/08 cocoa deficit forecast to 88,000 tonnes from a previous shortfall forecast of 41,000 tonnes.
Comments
Comments are closed.