Arabica coffee futures on ICE closed at a two-year low on Wednesday in choppy dealings as the eurozone debt crisis remained in focus ahead of a Greek election this weekend, while cocoa and robusta coffee turned higher. Sugar futures on ICE fell, causing July's premium to October to narrow slightly, as dealers monitored delays to the flow of sugar from top producer Brazil.
Global stocks were mixed while the dollar edged lower as weak US economic data and the simmering European debt crisis weighed on market sentiment. Arabica coffee futures were little changed after choppy trading that saw futures sink to a two-year low and then retrace losses. September closed down 1.15 cents, or 0.7 percent, at $1.5420 per lb, the lowest settlement for the second position since mid-June 2010.
The second month fell to an intraday low at $1.5370 post-settlement. "We have these Greek elections. All the markets are going to be nervous about them," said Sterling Smith, an analyst for Citigroup in Chicago. The weakening currency in top coffee producer Brazil has shielded farmers to some extent from the fall in arabica prices over recent months, dealers said. "If you translate the New York coffee price into real you'll find that it hasn't come down too much. So for the Brazilians it's not a disaster," said a London-based broker.
Brazil's harvest of a large crop is expected to weigh on prices in the near term, along with the trends of roasters switching out of arabica and into cheaper robusta where possible, and consumers buying lower cost robusta products. Robusta futures on Liffe edged higher, with September ending up $29, or 1.4 percent, at $2,099 a tonne.
Cocoa futures on ICE were firm but rangebound, appearing on track to climb to the 100-day moving average around $2,292 per tonne, basis September. "Bullish reports are having no impact on the market," a London-based broker said, referring to recent news from top grower Ivory Coast. Authorities in Ivory Coast have discovered and prevented a plot to overthrow the government organised by exiled military officers and a close adviser to former President Laurent Gbagbo, the interior minister said late on Tuesday.
ICE September cocoa futures rose $28, or 1.3 percent, to settle at $2,259 a tonne, while Liffe September futures gained 13 pounds, or 0.8 percent, to end at 1,551 pounds a tonne. Cocoa farmgate prices in Ivory Coast's main growing regions rose last week, led by firm prices at the country's two ports and strong competition for tight supply, farmers and buyers said on Wednesday.
Raw sugar futures on ICE eased, with prices remaining above last week's 22-month low, as dealers eyed the premium on the front-month. July's premium to October closed at 0.24 cent, down from 0.38 cent at the close on Tuesday, when it was supported by delays to Brazil's harvest, which could limit the amount of sugar available. July raw sugar futures finished down 0.44 cent, or 2.2 percent, at 19.92 cents a lb. The front month dipped to 18.86 cents early last week, its lowest level since August 2010. London August white sugar settled down $11.90, or 2.1 percent, at $568.40 per tonne.