White sugar futures ended lower on Friday with forecasts for a large global supply surplus in 2007/08 keeping the market on the defensive as prices slipped back towards its recent 21-month low, dealers said. Robusta coffee finished slightly up but well below the day's highs, weakened by a setback in New York's arabica market, while cocoa ended little changed.
Dealers noted the International Sugar Organisation on Friday projected a global supply surplus of 10.8 million tonnes in 2007/08, up from an already massive 10.3 million in 2006/07.
The report was issued just a day after merchant ED&F Man predicted the global surplus in 2007/08 would be in excess of 14 million tonnes and confirmed the market's current supply glut. October whites ended down $2.00 at $279.00 a tonne on Friday. The contract had dipped to a 21-month low for the front month of $272.00 last week.
Dealers saw support in October at $270.00 and resistance at $286.60. Robusta coffee futures ended slightly higher but a decline in New York arabica futures halted an earlier rally as the market sought to rebound from a recent three-month low.
COFFEE SLIGHTLY UP: November robustas finished $6 firmer at $1,706, well below the day's high of $1,738. The contract dipped to a three month low of $1,667 last Friday, weakened partly by turmoil in global financial markets, but has slowly been regaining lost ground this week.
Dealers said speculative buying had helped to fuel the earlier rise in prices with some hedge selling noted. "We've had some hedging from Indonesia but nothing from Vietnam," one dealer said.
Cocoa futures ended marginally down with the market back on the defensive following an upside technical correction with the focus back on anticipated bumper crops in West Africa. Dealers noted some talk that black pod might pose a threat to West African crops following recent heavy rains but others downplayed the significance of the disease. "I think it is a more credible issue this year as we've had plenty of rain," one dealer said.
COFFEE DOWN: Benchmark December ended down two pounds at 948 pounds a tonne. The contract touched 933 pounds on both Wednesday and Thursday, a six month low for the second position.