Coffee and sugar up

Raw arabica coffee and raw sugar futures on ICE gained on Thursday on limited short-covering after earlier touching multi-year lows due to speculator selling amid expectations for huge supplies from top producer Brazil, dealers said. Cocoa futures were down in technically-driven dealings.
July arabica coffee futures on ICE gained 1.6 cents, or 1.2 percent, to finish at $1.3005 per lb, after earlier falling to $1.2805 per lb, a contract low and the weakest price since March 2010. It was the front-month contract's first daily gain in five sessions and its largest one since early May.
Prices have been weighed by expectations of a record off-year crop in top producer Brazil and a large bearish stance held by speculators in arabica coffee futures and options, dealers said. Limited short-covering pushed coffee to recover from the day's earlier losses. "There is a perceived cheapness here and a technical bottom near the $1.25 level, which is slowing the descent," said Spencer Patton, founder and chief investment officer of Steel Vine Investment in Chicago.
Open interest totalled 167,580 lots on Wednesday, up by 5,470 lots from the previous session, as prices sank to a contract low, interpreted as new short positions entering the market. Liffe July robusta coffee settled down $12, or 0.6 percent, at $1,987 a tonne after dealers said some long liquidation had pressured the market lower. "The market broke below technical support at $1,980 and some stops were triggered," said a London-based broker. He said the target is $1,920.
July raw sugar rose 0.11 cent, or 0.7 percent, to settle at 16.76 cents a lb, after earlier dipping to 16.56 cents, the lowest level for the front month since July 2010. "The markets are technically oversold and may stage a short term rally, however there may be a limit to how much support it gets from end user buying on re-stocking programmes," said Nick Penney of brokerage Sucden Financial.
August white sugar on Liffe closed up $2, or 0.4 percent, at $474.90 a tonne after hitting $470.30, a contract low and the weakest level for the front-month contract since June 2010. Sugar prices have felt pressure from speculator selling, with non-commercial dealers holding a large net short position in raw sugar futures and options, dealers said.
Open interest totalled 869,107 lots on Wednesday, up by 5,810 lots from the previous session, as prices reached fresh lows. Expectation of a third global sugar surplus in 2013/14 kept prices under downward pressure. "We see prices hitting 15.50 cents easily," said a London-based broker, adding prices were expected to slide to this level over the coming months as Brazil's harvest comes in. The ICE July cocoa contract settled down $34, or 1.5 percent, to $2,283 a tonne in technically-driven dealings. On Liffe, benchmark September futures were down 25 pounds, or 1.6 percent, to settle at 1,544 pounds a tonne.