Arabica coffee jumps

Arabica coffee futures rallied in heavy volume on Friday, buoyed by strength in other commodity markets and options-related short covering that briefly pushed the March/May spread to an 11-month high, but the market posted a weekly loss. Raw sugar and cocoa futures also advanced, tracking gains in oil and share markets, with the 19-commodity Thomson Reuters CoreCommodity Index surging more than 3 percent and on track for its biggest one-day rally since August.
New York soft commodity markets will shut for the US Presidents Day holiday on Monday. ICE May arabica settled up 2.5 cents, or 2.2 percent, at $1.175 per lb, but closed the week down 4 percent.
Arabica prices were buoyed by short covering of the March/May spread, briefly narrowing its discount to $1.50 per lb, an 11-month high. This came after March options expired on Thursday and forced many to cover their shorts on the futures market, traders said. Traders also noted that exchange certified arabica stocks dropped sharply for the second straight day, by nearly 15,000 bags on Thursday, helping to underpin prices.
Also supportive was data from Brazil, the world's biggest coffee grower, showing that green bean exports in January fell from December, with Cecafe's president noting the country's low stocks. March robusta coffee settled up $37, or 2.7 percent, at $1,419 per tonne.
Raw sugar futures turned higher with March ending up 0.08 cent, or 0.6 percent, at 13.15 cents per lb, finishing the week down 0.9 percent. "The macro picture is slightly better ... with stock markets recovering some of their recent losses and oil markets higher," said Nick Penney, senior sugar trader with Sucden Financial. "It may simply be a short-covering rally and, in the case of the US, some book-squaring ahead of the holiday weekend." Traders in white sugar focused on the expiry at the end of the session of the March contract, with around 300,000 tonnes of sugar expected to be delivered. Dealers said they expected Central America to be a main origin tendered.
May white sugar settled down $2.20, or 0.6 percent, at $378.50 per tonne. Cocoa futures remained well within the volatile trading range held since late January. March London cocoa settled up 48 pounds, or 2.4 percent, at 2,060 pounds per tonne. May New York cocoa settled up $74, or 2.6 percent, at $2,874 per tonne, and closed the week up 3.3 percent, its sharpest gain since mid-November.