US arabica coffee futures trading jumped 3 percent Monday, in sympathy with other markets on hopes for a solution to the eurozone debt crisis, while cocoa closed around three-year lows as ample supplies weighed. Sugar was firm. Confidence that European leaders will come up with a credible plan to lead the region out of its debt crisis at a crucial summit this week lifted world stocks.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, reversed lower after the softs markets settled. Arabica coffee prices jumped, but remained stuck in a two-month range from $2.23-$2.55 per lb, basis March, supported by a softer dollar and investor buying. Diminishing crop prospects in countries including Colombia have been viewed as bullish while rising certified stocks have added pressure. Hopes of a solution to the eurozone crisis gave underlying support.
March arabica coffee on ICE jumped 6.85 cents, or 3 percent, to close at $2.3640 per lb, an inside day. The planned strike was seen added a mild bullish element to the market. "Trade in arabicas futures is expected to be rangebound for a bit longer," said Keith Flury, a senior soft commodities analyst with Rabobank. In the robusta coffee market, sales from Vietnam may be restricted by labour constraints and volatile prices, dealers said.
March robusta coffee on Liffe settled up $51, or 2.6 percent, at $2,040 a tonne. Speculators added net short futures positions in NYSE Liffe cocoa and feed wheat, while cutting their net short futures position in robusta coffee in the week to November 29, exchange data showed on Monday. Liffe cocoa futures closed at the lowest level in three years, while ICE cocoa dropped to the lowest in more than 2-1/2 years, weighed by large supplies, but the US market reversed slightly higher with a lift from the firm sterling.
March cocoa on ICE eased $22 to close at $2,206 a tonne, the lowest settlement for the second-month contract December 2008. London March cocoa closed down 15 at 1,420 pounds per tonne, its weakest finish since November 2008.
Continued hot and dry weather in western Ivory Coast, a key cocoa growing region, heightened worries among farmers that supply could drop off starting early next year. Raw sugar futures climbed on investment fund buying as the weaker dollar and the macro economic environment seemed to support the commodity sector this week. Expectations of big northern hemisphere crops, including a record French beet crop, limited potential upside in prices. Benchmark March futures gained 0.63 cent, or 2.7 percent, to finish at 24.08 cents a lb, while March white sugar futures on Liffe ended up $10.80, or 1.8 percent, at $624.40 per tonne.