Robusta coffee futures on Liffe fell to record lows on Thursday as investor selling triggered stops, while raw sugar on ICE rose with July particularly strong ahead of next week's expiry, dealers said. Cocoa prices were sharply higher with prices in London rebounding after setting a new six-month low.
Robusta coffee futures have fallen about $300 per tonne, or nearly 20 percent, in the past two weeks, weighed both by overall weakness in the coffee market and bearish fundamentals for robustas with supplies currently outstripping demand. September robusta coffee settled $12 lower at $1,313 per tonne, after the September position hit a contract low of $1,250, as investor selling triggered stops.
September cocoa settled 59 pounds higher at 1,649 pounds a tonne, rebounding after setting a new six-month low of 1,573 pounds a tonne. August white sugar closed $4.1 higher at $451.9 a tonne, following raw sugar on ICE with July particularly strong ahead of next week's expiry, dealers said. New York's September arabica contract edged up 0.15 cent to $1.1930 cents per lb.
"There is definitely a little bit of speculative long liquidation going on and I think trade and origin sell-stops were triggered on the way down," one robusta dealer said. CoffeeNetwork has forecast a second successive global surplus for robusta coffee in 2009/10 for the first time since the 2001/02 and 2002/03 seasons. Analyst Andrea Thompson said, however, the market could move into balance, or even deficit, if heavier than normal rains reduce crop prospects in top robusta producer Vietnam.
Dealers said the market has also derived support from concerns that delays to the Indian monsoon could reduce sugar yields in the world's top consumer while higher crude oil prices rose towards $70 a barrel and added strength to the market. India agreed on Thursday to raise the minimum price that mills must pay farmers for sugarcane by a third to a record high, aiming to expand planting in the world's No 2 producer and trim record high imports.
Dealers said industry buying helped to underpin prices which also rallied after setting a six-month low of 1,573 pounds for the second position. Barclays Capital, in a Global Outlook report issued on Thursday, saw scope for further gains. "We favour cocoa as grindings have fallen to what we believe are unsustainable low levels and the upcoming Ivory Coast elections will likely keep the market nervous about future supply," the report said.