Arabica coffee futures barrelled to its highest level in over three months on Friday due to tight supplies of high quality beans but the market was seen as heavily overbought and due for a correction. Sugar and cocoa futures climbed as well, buoyed in part by stronger outside markets where investors believe US Federal Reserve Chairman Ben Bernanke left the door open for further stimulus to bolster shaky world economic growth.
Liffe's London-based soft commodity markets will be shut on Monday for a UK public holiday. They will reopen on Tuesday. New York's December arabica coffee futures gained 3.70 cents, or 1.34 percent, to finish at $2.792 per lb, the highest settlement since May 10.
London's November robusta coffee on Liffe settled steady at $2,362 per tonne. "We could see the $3.00 (a lb) level but I would rather stay away because this market is very, very overbought," said Romain Lathiere, fund manager with Diapason Commodities Management.
Arabica coffee futures have risen for 14 straight sessions and were on track to extend that run, but may now be vulnerable to a downside correction. Raw sugar futures grinded higher as the market absorbed further forecasts for cuts in the cane crop of top producer/exporter Brazil and news that China may import up to 2.45 million tonnes of raw sugar in 2012.
New York's October raw sugar futures rose 0.56 cent, or 1.88 percent, to end at 30.22 cents per lb. London's October white sugar contract went up $9.40 to finish at $780.60 a tonne. Cane industry association Unica on Thursday put Brazil's key center-south's sugar output this season at 31.57 million tonnes, down 2.5 percent from its July estimate of 32.38 million tonnes.
A world cocoa surplus of 325,000 tonnes was expected in 2010/11, the International Cocoa Organisation (ICCO) said in its quarterly bulletin. New York's December cocoa contract rose $48 to close at $3,075 per tonne and London's December cocoa futures added 29 pounds to settle at 1,939 pounds a tonne.
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