Coffee and sugar futures rose on light investor buying on Wednesday, and cocoa held steady in dealings dominated by rollover business as markets nervously watched for clues to the outlook of the global economy.
Massive stimulus plans to drive the world out of recession took centre stage on Wednesday with the European Union asked to provide a 200 billion euro ($259.3 billion) boost and China announcing its biggest interest rate cut in 11 years. Coffee dealers spoke of light investor buying and a lack of sellers.
"It's the same kind of buying that we have seen in the last few days and a lack of selling," one robusta coffee dealer said. "It's largely speculative buying and the volume remains very light." London January robusta coffee futures rose $34 or 1.8 percent to $1,944 per tonne in thin turnover of 2,906 lots at 1526 GMT.
Benchmark ICE March arabica futures were up 0.25 cent to $1.1465 per lb, and some dealers saw upside price risk. "On the technicals, on the charts it looks like the market might move a little bit higher but that's just looking at the technical charts and I would suggest these levels can maybe hold or move a little bit higher," one coffee dealer said.
Coffee production in Honduras during the 2008/09 growing season is forecast to rise 7 percent from a year ago, a US Agriculture Department attache in Tegucigalpa said in a report released on Tuesday. Cocoa trade was characterised by rollover business, with an eye on an options expiry on Friday, dealers said. Concerns over slow bean arrivals to ports in Ivory Coast, the world's top cocoa grower, underpinned the market.
Cocoa arrivals at ports in No 1 grower Ivory Coast totalled 201,000 tonnes from October 1 to November 23, sharply down from 398,038 tonnes in the same period last season, exporters estimated. Sunny spells mixed with patchy rains in Ivory Coast's main cocoa growing regions last week would help the crop survive the dry season and extend the harvest into next year.
ICE March cocoa was up $26, or 1.2 percent, to $2,169 per tonne at 1528 GMT, while London March cocoa was up 4 pounds or 0.3 percent to 1,435 pounds per tonne in slim volume of 4,096 lots. In sugar, markets edged up on two-way investor dealings, with many players absent from their desks ahead of the US Thanksgiving holiday on Thursday, dealers said.
ICE March raw sugar futures were up 0.17 cent to 11.78 cents per lb at 1529 GMT, while London March white sugar was up $3.7 or 1.1 percent to $327.2 per tonne in slim turnover of 942 lots. Dealers see potential upside in sugar prices in the medium term, due to a tightening supply outlook.
Russia refined 2.79 million tonnes of white sugar from beet by November 24, up 9 percent from year-ago volumes, the Russian Sugar Producers' Union industry lobby said on Wednesday. US Sugar Corp said on Tuesday it had finalised a $1.34 billion contract to sell a massive tract of farmland to Florida, in a deal aimed at helping to cleanse and restore the state's fragile Everglades wetland.
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