Arabica coffee futures on ICE slipped to a 2-1/2-year low for the third straight session on Friday, while raw sugar recovered a bit after falling the previous session to the lowest level since August 2010, as both markets faced surplus supplies. Cocoa futures consolidated higher as dealers monitored the start of Ivory Coast's 2013/14 crop forward sales.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, climbed as the US dollar dropped, providing support to sugar and ICE cocoa futures. Arabica coffee futures on ICE Futures US briefly felt support from the weak dollar but late-day long liquidation and investor selling pushed the market down to a new low.
"The specs are shorting it and there's long liquidation," one US dealer said. Arabica futures are in a clear downtrend with abundant supplies following a bumper crop in top producer Brazil. Additionally, speculators are holding a large net short position. "I still think there's a lot of hedging that needs to be done. Any type of rally, Central America will be there to let the specs have it," said Nick Gentile, chief trader at Atlantic Capital Advisors in New Jersey.
March arabica coffee futures closed down 0.45 cent, or 0.3 percent, at $1.4315 per lb, the lowest settlement for the second month since June 2010. In robusta coffee, certified stocks continued being drawn down, with the latest exchange data showing stocks held in NYSE Liffe nominated warehouses fell to 105,140 tonnes as of December 10, down from 108,490 tonnes on November 26. Dealers monitored the premium on the front-month January contract over March, which has widened sharply on Thursday to about $47 per tonne, partly due to depleted certified stocks. It narrowed during this session, trading around $37.
March robusta coffee futures closed down $20, or 1.1 percent, at $1,872 a tonne. Raw sugar futures on ICE closed just above resistance at 19 cents per lb, basis the benchmark March contract. March raw sugar futures on ICE rose 0.47 cent, or 2.5 percent, to close at 19.01 cents a lb, after dipping to the 28-month low of 18.31 cents the previous session. Dealers said the outlook remained bearish with the third consecutive global surplus likely to push prices lower.
March white sugar on Liffe gained $8.90, or 1.8 percent, to settle at $508.70 per tonne after touching $495.00 on Thursday, the lowest level for the front month since June 2010. In cocoa, March futures on ICE climbed $13, or 0.5 percent, to close at $2,435 a tonne. Liffe March cocoa futures ended up 15 pounds, or 1 percent, at 1,545 pounds per tonne. Valid cocoa stocks in NYSE Liffe's nominated warehouses fell slightly to 48,330 tonnes as of December 10, from 49,170 tonnes on November 26, exchange data showed.