Coffee futures sink

Coffee futures in New York and London sank to fresh multi-year lows for a second straight session on Friday and posted large weekly losses as expectations of another year of excess supplies kept investors selling and buyers on the sidelines. Even as raw sugar futures on ICE gained on the day, they posted their first weekly loss in a month as the market assessed damage from a warehouse fire in Santos, Brazil, that lifted the contract to an one-year high last week.
ICE cocoa futures gained as traders squared positions following the worst two-day rout in months. The December arabica coffee contract on ICE Futures US closed down 1.2 cents, or 1.1 percent, at $1.091 per lb after setting a 4-1/2-year low of $1.088. The front month finished the week down nearly 5 percent, its biggest one-week loss since late August.
Continued investor selling outweighed the limited physical demand that came in at this week's fresh lows, traders said. "Sentiment is extremely bearish as industry stays on the side and speculators initiate new shorts," Volcafe, the Swiss-based coffee division of commodities house ED&F Man, said in a report.
Liffe January robusta coffee futures hit $1,536 per tonne, a contract low and the weakest level for the second month contract in more than three years, before closing down $44, or 2.8 percent, at $1,538 per tonne for a weekly loss of almost 5 percent. ICE March raw sugar futures inched up 0.06 cent, or 0.3 percent, to finish at 19.03 cents per lb. The front month saw its first weekly loss in a month, erasing most of the gains that took sugar to a one-year high of 20.16 cents per lb last Friday, after a fire ravaged Copersucar's terminal in Santos, Brazil.
"We're back to the range we were in before the fire and we're hovering here. We have this logistical issue on the one side, but we have plenty of sugar on the other," said Price Futures Group's Scoville, pointing to large output in other major producers including India and Thailand. Assessment in the week following last Friday's fire at Copersucar-controlled warehouses showed loading facilities were not damaged and made last week's surge seem overdone.
The sugar market shrugged off news of another fire on Friday at a small Brazilian sugar warehouse owned by logistics firm Agrovia in Santa Adelia, Sao Paolo state, as traders said they expected the damage to be contained. December white sugar on Liffe closed up $1.00, or 0.2 percent, at $503.30 a tonne. In cocoa, front-month ICE December futures rose $27, or 1 percent, to finish at $2,713 a tonne as traders squared positions ahead of the weekend after the worst two-day rout since July. London March cocoa futures gained 16 pounds, or 0.9 percent, to settle at 1,718 pounds per tonne.