Soft commodity futures finished mostly higher Wednesday in jittery short covering as a looming Group of 20 meeting and Greece's decision to hold a referendum on its bailout package reduced risk appetite. Greece's prime minister faces a grilling from the leaders of Germany and France on Wednesday after winning backing of his cabinet to hold a referendum on a 130-billion-euro ($178 billion) rescue deal.
"The Greeks are playing a game of chicken with the world economy," said Country Hedging Inc analyst Sterling Smith. New York's December cocoa futures rose $65 to finish at $2,665 per tonne. On Tuesday, the market tumbled 3.6 percent in its biggest fall in two months. London's December cocoa contract went up 25 pounds to close at 1,654 pounds per tonne.
The cocoa market was pressured by ample supplies and improving arrivals data in West Africa, the world's top growing region. "Ivory Coast has had pretty good weather so far but we don't know what the Harmattan (wind) after Christmas could bring and that can bring quite devastating dryness and that could dent the mid-crop," said Gary Mead, analyst with VM Group.
The impact of the collapse of brokerage MF Global seems to be dying down, traders said. "I think the MF Global situation is beginning to pass," said Smith. Sugar and coffee markets were in wait-and-see mode, watching for how the Greek and eurozone crisis unfolds.
"Sugar is just running with the herd here," said James Kirkup, head of sugar brokerage at ABN AMRO Markets (UK) Ltd. The key March raw sugar contract added 0.08 cent to finish at 25.42 cents per lb. London's December white futures shed 10 cents to close at $680.30 per tonne.
Sugar production from the main centre-south cane region is now forecast at 30.8 million tonnes, down from 31.57 million tonnes projected in August, industry association Unica said in its latest forecast of the 2011/12 crop. New York's December arabica coffee contract rose 0.35 cent to end at $2.24 per lb. London's January robusta contract fell $16 to close at $1,862 per tonne.