Liffe March cocoa closed a day at 45 pounds higher at 2,055 pounds a tonne on Wednesday after climbing to 2,060 pounds, the highest level for the contract since December 7. Market boosted by technical buying, a strong commodity complex and uncertainty about crop flows from top grower Ivory Coast.
Liffe March robusta coffee down $28 at $2,119 a tonne as funds may look to scale back large net long positions, especially after robustas failed to set contract highs on Tuesday. Liffe March white sugar ended $8.60 lower at $771.60 per tonne, reversing early gains. High prices and volatility limit speculator and physical demand until India's crop outlook becomes clear, dealers say.
Dealers continued to monitor developments in Ivory Coast, where African efforts to mediate the disputed elections failed, said Kenyan Prime Minister Raila Odinga, raising the possibility of harsher sanctions or military force. "I think there's a lot of uncertainty about what this means, and people are still worried about this situation blowing up," said Keith Flury, senior commodity analyst at Rabobank in London. "I don't think there's many people willing to go short in such a market in case other policy moves come in." "I think it is a bit of a technical breakout," one dealer said, noting buying interest picked up as March broke through resistance around 2,027 pounds a tonne.
Coffee bucked the overall firmer trend in commodity markets on concern funds may look to scale back large net long positions in both ICE and Liffe, with some selling after robusta prices failed to set contract highs on Tuesday, dealers said. "I think there is an element of disappointment. When we got within $3 of the contract high yesterday I expect people were looking for fireworks. It didn't happen and I think a few longs are taking profits," one dealer said. Dealers said robusta origins appeared to be largely sidelined: "I think Vietnam is very well sold for this time of year," one dealer said.
Top robusta producer Vietnam has harvested an estimated 1.106 million tonnes, or 18.43 million bags, of coffee in the 2010/2011 season, up 4.6 percent from the previous crop year, an online website said.