Liffe July robusta coffee rose $56 to close at $2,611 a tonne on Tuesday, having earlier hit a contract high of $2,619. Market supported by surge in ICE arabicas to a fresh 34-year peak. Liffe August white sugar fell $5.60 to close at $609.50 a tonne after earlier hitting a 7-month low of $597.50. Market weighed by improving supply outlook.
Liffe July cocoa ended 3 pounds higher at 1,984 pounds a tonne. Traders monitoring developments in top grower Ivory Coast as exports resume after a violent power struggle. "I would expect that the market will remain very supported for the next couple of months because of the off-year crop in Brazil and the Central American crops will also only start again in October/November," Stefan Uhlenbrock, commodity analyst at consultancy F.O. Licht, said.
"It's a tight situation, as every roaster will tell you," Uhlenbrock added. Brazil, the world's top coffee producer, is set to harvest its largest ever off-year crop, estimated at between 41.9 million and 44.7 million 60-kg bags. Output falls every other harvest as part of arabica's biennial cycle.
Jack Scoville, an analyst for brokers The Price Group, said July arabicas stalled at its high for the day before late short-covering pushed it back into positive territory. "It's been a very two-sided day," he said. First notice day on the May robusta contract saw 11,185 lots delivered to broker ABN Amro, in line with the total deliveries against the March contract. Liffe coffee contracts can be tendered anytime during the month.
Raw sugar futures recovered in a technical bounce despite a stronger dollar, but dealers said they expected benchmark front-month futures to test key support at 20 cents soon due to ample supplies from Brazil and key exporter Thailand. Dealers noted talk of a pickup of physical demand for sugar, including ongoing buying tenders by Egypt and Tunisia, due to the recent slide in sugar futures prices and holidays in many countries.
"A lot of people are looking for the market to move to 20 cents, but it was not unexpected to have a bit of a bounce today," a senior London-based physical sugar trader said. Cocoa futures declined, with traders saying origin selling was weighing on prices with Ghana expected to have hedged cocoa in recent sessions and possibly on Tuesday also.