Cocoa and coffee slip

Cocoa futures slid on Thursday after a strong advance early this week, while arabica coffee posted losses as prices fell back toward recent 17-month lows. Raw sugar futures clawed higher supported by a diminishing outlook for the crop in top producer Brazil. However, dealers said the market is firmly capped at 26 to 26.50 cents, basis May.
May cocoa on ICE stumbled $74, or 3.14 percent, to finish at $2,285 per tonne. May cocoa futures on Liffe fell 35 pounds, or 2.31 percent, to end at 1,479 pounds a tonne. "We saw cocoa pretty (well) supported the last couple of days and now we're probably just seeing a little bit of steam come off of that," Rabobank analyst Keith Flury said. Analyst Jack Scoville of Chicago-based The Price Group said pressure from the looming mid-crop of top grower Ivory Coast may have pressured markets in New York and London.
Prices fell sharply late last week, weighed down by a forecast by a closely watched independent analyst which indicated an improving crop outlook for 2011/12. Rabobank's Flury said there appeared to be a market equilibrium around $2,350. "We seem to be hovering up and down around that (price) but always coming back to it, so I think that we're going to probably stick around that level until there's a better idea of what the mid-crop is going to be," he said.
Arabica coffee futures on ICE were lower with the rebound from last week's 17-month low apparently running out of steam. May arabicas on ICE dropped 7.75 cents, or 4.2 percent, to close at $1.7695 per lb. London's Liffe May robusta coffee futures fell $14 to close at $2,008 per tonne.
Romain Lathiere, head of dealing at Diapason Commodities Management, said he believed the floor of the market was around $1.75 to $1.80 per lb. Fresh buying interest from roasters, tight stocks and expectations for steady growth in global consumption could pave the way for a rebound in benchmark arabica coffee futures, potentially to $2.25-$2.30 per lb in coming months, he said. Scoville said technical pressure undermined coffee. The spot arabica contract slid to its lowest level in 17 months, Thomson Reuters data showed.
Raw sugar futures on ICE were higher, with diminishing expectations for production from the key centre-south region of Brazil remaining the key supportive factor. May raw sugar on ICE rose 0.58 cent, or 2.28 percent, to end at 25.91 cents a lb. May white sugar futures on Liffe gained $7.60, or 1.15 percent, to close at $663.00 per tonne. "The fact that expectations have actually been lowered the last couple of weeks has been very supportive for the market," Flury said.