Cocoa, raw sugar and arabica coffee futures on ICE all eased on Friday, weighed by the strength of the dollar as the euro weakened on concern about the financial outlook in Greece. "Currency markets are driving the price of commodities at the moment," one London cocoa dealer said.
Another London dealer said, "It's been very dollar driven." The euro hit an 8-1/2-month low against the dollar on Friday after a European Union summit on Greece failed to quell uncertainty about the country's debts, while monetary tightening by China pushed high-risk currencies lower.
May cocoa on ICE fell $29 to $3,087 a tonne by 1555 GMT. The setback stalled a market rally this week which saw the second month rise from a low of $2,990 on Monday to a peak of $3,125 on Thursday.
Dealers said the rise was largely technically driven, with system funds among the key buyers, although growing concern about political unrest in Ivory Coast provided background support. May cocoa on Liffe stood unchanged at 2,256 pounds a tonne. The strong dollar also weighed on sugar.
"The dollar is up and this is causing across-the-board weakness in the commodities space," said James Kirkup, director and head of sugar brokerage at Fortis Bank Nederland in London. Dealers said they expected around 100,000-150,000 tonnes of white sugar to be delivered against expiry of the Liffe March contract on Friday. March raw sugar on ICE fell 0.49 cent to 27.04 cents a lb while March whites on Liffe eased $6.10 or 0.8 percent to $739.0 per tonne.
Coffee futures were also swept lower by the broad-based losses in commodity markets with May arabica futures on ICE off 0.4 cent to $1.3325 per lb. May robusta futures on Liffe eased $4 or 0.3 percent to $1,327 per tonne with the market drifting down towards a contract low of $1,310 set earlier this week.