Arabica coffee futures consolidated lower on Thursday, pressured by a firmer dollar and commercial hedging, while cocoa inched up from the previous session's three-month low. Sugar also edged higher, supported by the prolonged dry weather interspersed with scattered rains in top producer Brazil's centre-south region.
"There are so many moving parts today as far as risk on, risk off, and that's what's really creating a sideways market in these softs," said James Cordier, senior analyst of brokerage Optionsellers.com in Florida. In other news, a rise in Spanish bond yields renewed fears the euro zone's financial health, while US jobless claims data fell to a near four-year low and the number of planned layoffs at US firms dropped to its lowest in 10 months.
London softs markets will be closed on Friday and Monday for the Easter holidays. ICE markets will be closed on Friday and will reopen late at 7:30 am EDT (1130 GMT) on Monday. "Coffee is really in transition here. We've had huge open interest while the market has fallen," Cordier said. Total arabica open interest jumped by 2,691 lots to 160,503 lots on April 4, the highest since August 2010.
May arabicas on ICE fell 1.75 cents to end at $1.83 per lb, an inside day after Wednesday's volatile session. Brazil is widely expected to produce a large coffee this year, a so called on-year of high output in the country's biennial crop cycle. Benchmark Liffe May robusta coffee futures inched down $4 to settle at $1,987 per tonne. International trading houses have started offering higher-grade Vietnamese robusta to Indonesian roasters who are struggling to get beans from the domestic market despite the current harvest, dealers said.
Cocoa futures on ICE firmed in choppy dealings after the prior session's slide to the lowest level in almost three months. May cocoa on ICE rose $2 to settle at $2,085 a tonne. Total volume was heavy at more than 41,000 lots, roughly double the 30-day average as the May/July spread remained active.
Jack Pollard, technical analyst with Sucden Financial Research, said he saw key support in ICE second-month cocoa at $1,892 per tonne. London May cocoa closed down 23 pounds, or 1.7 percent, at 1,421 pounds per tonne. Raw sugar prices firmed with May rising 0.16 cent, or 0.7 percent, to close at 24.58 cents a lb. London May white sugar futures edged up $5.40, or 0.8 percent, to finish at $643.90 per tonne.