US cocoa futures inched upward on Thursday, on track to finish with the strongest quarter in three years as the market traded in a narrow band after recently falling from a 10-month high, while coffee jumped on the heels of the firm commodity complex. Sugar turned higher after earlier pressure from rising Chinese output. Many stock markets and commodities rose after the Spanish government said it would cut spending sharply and opened the door for a potential European bailout.
ICE December cocoa futures closed up $13, or 0.5 percent, at $2,482 per tonne, on track to end the third quarter up more than 8 percent, the highest quarterly increase since the third quarter of 2009. The contract climbed to a 10-month high at $2,744 per tonne on September 6 and total open interest later soared to a record high at 207,128 lots as dealers worried that production may fall short of demand. Speculators lifted their net long position to the highest level in more than two years.
Dealers said they anticipated weak third-quarter European cocoa grind figures, a measure of demand, next month. "I think there has been a setback in consumption. There's going to be a down figure (in Q3 grind)," one London-based cocoa futures broker said. Eric Sivry, head of agri-options brokerage at Marex Spectron, said, "The consensus is for a number sharply down when compared to the previous year."
Light rainfall and abundant sunshine across most of Ivory Coast's main cocoa regions last week will encourage healthy output as the new harvesting season opens, farmers and analysts said on Tuesday. Liffe December cocoa inched up 4 pounds, or 0.3 percent, to close at 1,601 pounds per tonne. Robusta coffee futures jumped to the highest level since August 10 while arabica also climbed, feeling a boost from the day's risk-on buying.
November robusta coffee futures climbed $58, or 2.7 percent, to close at $2,188 a tonne, after hitting at seven-week high at $2,189. "There are reports that supplies of old crop beans (from Vietnam) are tight," said Birgit Wippler, a soft commodities analyst with F.O. Licht in Germany.
ICE December arabica coffee futures finished up 4.85 cents, or 2.9 percent, at $1.7430 per lb. The spot contract is on track to close the third quarter up a slight 2.5 percent, its biggest quarterly gain since the first quarter of 2011. ICE certified arabica stocks continued their steady climb, rising by 6,374 bags to 2,121,276 bags by September 26, the highest in more than two years. A whopping 154,516 bags were pending grading, exchange data showed.
The ICE October contract, which will expire on Friday, ended up 0.03 cent, or 0.2 percent, at 19.60 cents per lb. March raw sugar futures crept up 0.01 cent to finish at 20.39 cents per lb December white sugar on Liffe rose $2.90, or 0.5 percent, to settle at $573.20 per tonne.