Liffe second month September cocoa settled at 2,436 pounds per tonne on Wednesday, up 39 pounds, having earlier touched a 32-year high of 2,465 pounds. Dealers eyed the impending July expiry on Thursday as the front-month premium swung in volatile trading.
Liffe front-month white sugar futures settled at $578.2 per tonne, down $18.50, following Thailand's purchase of 74,350 tonnes this week. Liffe second-month robusta coffee settled at $1,731 per tonne, up $10, underpinned by limited fresh supplies in the lead up to Vietnam's harvest. Day earlier, Liffe cocoa futures rose to a 32-year high on Wednesday after a larger than expected rise in Europe's quarterly cocoa grind signalled firming demand, while sugar futures slipped.
Arabica futures edged lower, under pressure from a lack of roaster buying, but prices remained near a 12-year high hit in June. Europe's cocoa grind - an indicator of demand - rose 12.7 percent year-on-year to 328,704 tonnes in the second quarter of 2010. "It was above expectations, clearly the economic recovery has had some play," Kona Haque, commodities analyst at Macquarie Bank said.
Barclays Capital said in a daily market report: "The data shows a firming in demand conditions after the aggressive de-stocking through H2 2008 and early 2009 on recessionary conditions." Participants are monitoring large nearby premiums on the London market with July/September closing at 204 pounds on Tuesday and widening to around 230 pounds on Wednesday. Sugar futures were slightly lower, whites remained near last week's four-month highs, supported by a heavy line-up of vessels at Brazilian ports, reflecting strong global demand, dealers said.