London robusta coffee futures were lower on Thursday with the market retreating slightly after reaching contract highs the previous day, while sugar was up and cocoa mixed. Coffee dealers said the market advance in recent days was largely due to a supply squeeze on the November contract and Thursday's setback might prove short-lived.
"It appears the open interest is still bigger than available coffee so at some point if people don't get coffee graded they will have to buy November again," one dealer said. November coffee fell 0.3 percent to $2,429 a tonne while the January contract fell 1.08 percent to $1,928. The second month set a contract high of $1,997 on Wednesday but failed to breach the key $2,000 mark.
The front month's open position fell by 2,774 lots to 18,986 lots but remained above available exchange stocks. It saw 653 lots tendered on Thursday, with almost all coffee bought by Fortis Bank Global Clearing, the receiver of the bulk of tenders to date.
Vietnam's coffee harvest was under way on Thursday after recent rain delays but a typhoon headed towards the region could bring rains at the weekend, potentially disrupting outdoor drying. The top robusta producer will not apply stricter coffee export standards immediately as it had ruled earlier because it needed more time to raise awareness among market players, a senior industry official said on Thursday.
COCOA MIXED: December cocoa fell around 0.2 percent to 925 pounds a tonne while March rose 0.1 per cent to 957 pounds a tonne. "There is producer selling pressure about 30 pounds (per tonne) above the market and industry buying pressure underneath," a cocoa dealer said.
Recent rains in Ivory Coast have heightened concern about black pod disease, providing some market support. In the sugar market, dealers noted active position rolling before expiry of the front-month December contract on November 15. December sugar closed up 0.7 percent at $279.60 a tonne while March closed up 0.21 percent at $287 50 a tonne. "We are seeing some producer selling," one trader said. "Support in December is at $275 and then $271 50 and $270. There is a very faint line of resistance very close - and $286, $288 and $290." Upside potential was capped by a huge global oversupply, driven by leading producers Brazil and India.
A group of former European colonies warned on Thursday that a dispute over their sugar exports could set back attempts by Brussels to clinch new trade and investment deals by the end of the year.