Cocoa futures extended their losses to set multi-month lows on Thursday on technical selling after falling below key 200-day moving averages, with the markets in both London and New York facing their first weak quarterly performance in a year. Raw sugar futures on ICE Futures US jumped more than 2 percent to a three-week high as funds took profits from their short positions, while arabica coffee inched lower and was on track to see its biggest annual fall in 12 years.
Robusta futures on Liffe climbed for the sixth straight session but was set to end the fourth quarter with its weakest quarterly performance since the period ending in September 2011. Liffe markets reopened on Thursday after a two-day holiday, and trends partly reflected an adjustment to the prior day's performance on ICE, which was open on Wednesday. Liffe May cocoa closed down 21 pounds, or 1.4 percent, at 1,448 pounds per tonne, the lowest settlement for the second month since May 30. The contract has dropped more than 10 percent so far in the fourth quarter, its only weak quarterly performance in 2012, as supplies have been plentiful. Prices have dropped for seven sessions straight, falling nearly 7 percent, since the contract failed to close above the 200-day moving average at 1,553 pounds on December 14.
"The problem you have with cocoa is there is not a great deal of support (nearby)," Sucden Financial analyst Jack Pollard said, adding the market could easily fall another 40 to 50 pounds before finding chart-based support. March cocoa futures on ICE closed down $8, or 0.4 percent, at $2,255 a tonne, marking the spot contract's eighth straight lower settlement and its weakest since July 25.
The benchmark March contract dropped below the key 200-day moving average five sessions previous, a technical sell signal for many traders. On Thursday, the 14-day moving average crossed below the long-term moving average. The spot contract has also fallen more than 10 percent in the current fourth quarter, marking its first weak quarter in a year. On a monthly basis, it's down about 11 percent, its weakest monthly performance since November 2011.
Raw sugar futures on ICE were higher as dealers holding short positions grabbed profits, with March settling up 0.40 cent, or 2.1 percent, at 19.45 cents a lb, after reaching the highest since December 6 at 19.55 cents. Producer selling around 19.50 cents capped the upside.
March white sugar on Liffe rose $5.90, or 1.1 percent, to end at $522.40 per tonne. Arabica coffee futures on ICE were lower in choppy dealings as the market continued to consolidate after climbing earlier this month from a 2-1/2-year low, with the second month touching $1.422 per lb on December 14. March arabica closed down 0.40 cent, or 0.3 percent, at $1.4790 per lb.
The arabica market is by far the weakest performer on the Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, having dropped around 34 percent since the end of 2011. Frozen concentrated orange juice is the second weakest performer, down roughly 15 percent. Arabica futures are on track for their lowest annual performance in 12 years, preliminary Thomson Reuters data showed. March robusta coffee futures closed up $14, or 0.7 percent, at $1,920 a tonne, underpinned by low certified stocks.