London robusta coffee futures jumped on Monday on improved sentiment after the US Federal Reserve's confidence-building move last week, while sugar fell on pressure from a huge global oversupply.
London cocoa futures drifted lower, weighed down by expectations of a big 2007/08 West African main crop output, but traders noted some bullish signals, notably the risk of black pod disease after above average rainfall in the region.
London robusta coffee futures rose on a combination of industry buying and speculative demand after the Fed moved to restore confidence in financial markets on Friday by cutting its discount rate. "There is good support from industry and specs," one dealer said.
The robusta coffee market has been supported by robust demand and tight supplies. November closed up $19 or 1.07 percent to $1,700 per tonne in brisk volume of 13,132 lots.
However, dealers referred to risks of volatile trade in the coming days on continuing uncertainty over global liquidity despite the Fed's confidence-building action last week. They referred to support in November at around $1,665 and resistance at $1,757.
Cocoa futures traded at around six-month lows on continuing expectations of a large 2007/08 West African main crop output, although traders referred to talk of black pod disease in top grower Ivory Coast due to above-average rainfall. There was no immediate confirmation. December finished down 15 pounds at 938 pounds per tonne, just above the six-month trough of 936 pounds.
Patchy rain fell in Ivory Coast's main cocoa zones in the last week, interspersed by long sunny spells, farmers said on Monday, providing good growing conditions for an expected abundant October-March main crop.
London white sugar futures were weaker on active rolling of positions in the front months against a backdrop of a global oversupply of the sweetener, dealers said. October settled down $1.40 at $280.40 per tonne in moderate volume of 2,179 lots. Dealers said funds were believed to have gone net short in white sugar, and said the overwhelming sentiment remained negative due to the sugar surplus.
Ethiopia has received the first batch of a 36,000 tonne raw sugar purchase agreed earlier this year to meet a shortfall in domestic production caused by freak rains, the state-run sugar body said on Monday.