Cocoa futures closed on Friday at another three-year low, while sugar slipped, pressured by big supplies from northern hemisphere crops and by declines in a few other commodity markets. Coffee was little changed in indecisive, choppy dealings. Commodity investors' got out of some of their riskier assets while global stocks and the euro rose after nearly all European Union leaders agreed to build a closer fiscal union to address the region's debilitating debt crisis.
Cocoa futures have fallen more than 22 percent since early November, reaching extremely technically oversold levels on the relative strength index. The market has been pressured by plentiful nearby supplies and bearish macro sentiment. March cocoa on ICE dropped $64, or 3 percent, to end at $2,067 a tonne. It finished the week down 7.2 percent, dropping for the sixth straight week and marking the biggest weekly drop in three months.
London March cocoa settled down 31 pounds, or 2.3 percent, at 1,338 pounds per tonne. Both settlements were the weakest since November 2008. Cocoa arrivals at ports in top grower Ivory Coast reached 422,430 tonnes by December 4, up from 400,043 tonnes in the same period a year ago, data from Bourse du Cafe et Cacao (BCC) showed. ICE raw sugar futures tumbled, following two volatile, yet sideways, sessions with pressure coming from expectations of big supplies from northern hemisphere producers such as Russia and Ukraine. "We are in a transition to a surplus," said James Kirkup, head of sugar brokerage at ABM Amro Markets (UK) Ltd.
Benchmark ICE March sugar futures sank 0.73 cents, or 3 percent, to settle at 23.40 cents a lb, remaining within the ranges of the two previous volatile sessions. Kirkup saw 22.71 cents as a key support level. "We're having our third session of yo-yo trading. From my perspective, there's little substance," Jeff Bauml, a senior vice president with brokerage R.J. O'Brien & Associates in New York.
March white sugar futures on Liffe tumbled $18.20, or 2.9 percent, to end at $605.20 per tonne. Consultancy Kingsman SA trimmed its 2011/12 global sugar surplus forecast by almost 1 million tonnes to 8.2 million tonnes, while the US Agriculture Department lowered slightly its forecast for domestic sugar supplies. "Markets have been jittery, in low volumes," said Andrey Kryuchenkov, a fund manager with VTB Capital who tracks soft commodities markets, in a reference to the EU summit. March arabica coffee on ICE inched down 0.90 cent to finish at $2.2775 per lb. March robusta coffee on Liffe settled up $15 at $1,962 a tonne.