May white sugar ended $7.10 lower at $706.90 a tonne on Thursday. Market under pressure from insufficient offtake from key importers and strength of dollar. May cocoa on Liffe ended 7 pounds higher at 2,263 pounds a tonne. Traders continue to keep close eye on political unrest in top producer Ivory Coast.
May robusta coffee ended off $4 at $1,306 per tonne after setting a contract low of $1,303. Stronger dollar helped to keep market on the defensive. Earlier, arabica coffee, raw sugar and cocoa futures on ICE all rose on Thursday as a weaker dollar prompted broad-based gains in commodity markets.
Dealers noted arabica coffee was underpinned by a shortage of good quality supplies, a gradual drawdown in exchange certified stocks and significant uncertainty about the outlook in Brazil with estimates for the 2010/11 crop varying widely. "I am friendly towards coffee at these levels. I think we could see it back up in the $1.40 range," said fund manager Matthew Sena of Castlestone Management.
The contract traded as high as $1.51 in mid-December but fell steadily to a low of $1.3035 early last week before the market found support and started to recover. The dollar fell broadly on Thursday as an unexpected jump in weekly jobless claims dampened hopes for a fast recovery in the US labour market, raising concerns on the outlook for the economy.
Dealers said raw sugar prices also turned higher as the dollar declined, rebounding off an earlier eight-week low. "I still think we are in a range. We might creep down in the next couple of days but I would view it as a buy opportunity," Sena of Castlestone Management said.
Dealers said sugar was underpinned by supportive fundamentals although there remained some concern that key buyers appear reluctant to pay current prices. Pakistan bought 50,000 tonnes on Thursday at a price far below offers from better known suppliers. "The low price awarded raised eyebrows as the bid made was sharply below other offers and the seller was apparently not pre-qualified to bid," one European trader said. Veeresh Hiremath, a senior analyst with commodity brokerage Karvy Comtrae, saw raw sugar prices holding in a broad range of 20 to 31 cents a lb.
Comments
Comments are closed.