Arabica coffee futures soared on Friday, posting the biggest jump in 16 months on concerns about heavy rains in Central America, dwindling certified stocks and a lack of producer selling. Sugar and cocoa finished mixed. "One small fundamental factor that is important is the certified (stocks) drawdown. Then you have the macro picture, which is somehow driving things higher with Europe, and then third you have piling on," said one US coffee dealer, referring to buying that was spurred by the rally.
December arabica futures on ICE jumped 13.20 cents, or 5.7 percent, to close at $2.4485 per lb, the biggest daily percentage gain since June 2010. It peaked at $2.4670. Total volume rose above 28,000 lots, the highest since September 22, preliminary Thomson Reuters data showed.
Heavy rains in Central America, where high-quality washed arabica beans are grown, helped lift the market, which rallied in heavy volume and attracted chart-based buying after hitting key levels, dealers said. ICE certified arabica stocks dropped nearly 30,000 bags to 1,335,857 bags by October 20, the lowest since February 2000, ICE data showed, while certified robusta stocks held in NYSE Liffe nominated warehouses fell to 350,000 tonnes as of October 17 from 367,560 tonnes on October 3.
"The producer is really determined not to sell. He is holding on to his coffee and doesn't want to sell," said Andre Lounine, trader at the Thesi brokerage in Varginha. The rains in Central America are also affecting the market. London November robusta coffee closed up $54, or 3 percent, at $1,868 per tonne.
"Let's see how we get through (the European debt issue) on Monday morning," said Country Hedging Inc analyst Sterling Smith. Traders said talk that Chinese sugar imports may not be as large as initially thought and a perceptible lack of interest every time the March contract goes past 27 and 28 cents weighed on prices for the sweetener.
March raw sugar reversed to close down 0.32 cent, or 1.2 percent, to finish at 26.48 cents a lb, while December white sugar futures on Liffe rose $23.40, or 3.4 percent, to end at $706.40 a tonne. ICE December cocoa inched up $4 to settle at $2,566 a tonne. The contract dipped to $2,523 on Tuesday, the lowest level for the front month in more than two years. North American third-quarter cocoa grindings rose 3.42 percent from 2010 to 124,621 tonnes, data from the National Confectioners Association said on Thursday. December cocoa on Liffe fell 17 pounds to close at 1,654 pounds per tonne.
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