Cocoa futures climbed for the sixth straight session on Tuesday to a two-year peak as global supply concerns spurred investors to continue buying, while Liffe robusta coffee turned lower. Arabica coffee on ICE Futures US was flat, after climbing above a five-year low earlier in the month, while raw sugar was little changed in thin dealings.
ICE March cocoa settled up $15 or 0.5 percent, at $2,795 a tonne, having earlier hit $2,820, the highest level for the second month contract since September 2011. Total open interest rose by more than 2,000 lots to 205,831 lots on November 18, its second straight increase after dropping for six prior sessions, exchange data showed. March cocoa on Liffe closed up 8 pounds, or 0.5 percent, at 1,774 pounds a tonne, having earlier hit a two-year high of 1,785 pounds. Dealers said the market derived support from tightening supplies and a constructive technical outlook as both ICE and Liffe broke above recent highs and neared the long-term 50 percent Fibonacci retracement levels.
"The market has risen to these levels due to poor weather conditions over recent months - a drought in West Africa - as well as hopes of high demand as part of a continuing economic recovery in the United States and euro zone countries," Capital Economics analyst Tom Pugh said. Recent flooding in top cocoa grower Ivory Coast's main producing area, however, had some dealers concerned, analysts said. Liffe January robusta coffee turned down $3, or 0.2 percent, to close at $1,563 a tonne, correcting slightly after rallying 8.3 percent the past two sessions.
Dealers said robusta prices were supported earlier, partly by concerns that rains will slow harvesting in top producer Vietnam. ICE March arabica futures ended down 0.90 cent, or 0.8 percent, at $1.0855 per lb. "Short term, we expect some initial consolidation around the $1.10 area, while a break above the $1.10 level opens potential for further gains toward the 40-day moving average in the $1.1337 area," said Myrto Sokou, analyst at Sucden Financial Research.
ICE March raw sugar futures traded down 0.10 cent, or 0.6 percent, to close at 17.65 cents a lb, hovering above Friday's seven-week low at 17.50 cents in thin dealings. The recent drop in prices had stimulated physical demand, said Commonwealth Bank of Australia analyst Luke Mathews, adding that the Brazilian real's 2 percent rally against the dollar on Monday had provided support for prices, making dollar-denominated international prices less attractive for Brazilian producers. March white sugar on Liffe finished down 80 cents, or 0.2 percent, at $469.20 per tonne in slim volume.
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