New York arabica coffee futures advanced on short-covering on Thursday, and robusta coffee in London eased, with both markets hovering near multiyear lows in choppy trading as huge global supplies pressured the market. Liffe white sugar futures dropped to an over three-year-low because of weak demand, as ICE cocoa gained. Financial markets rallied as the US Federal Reserve indicated it will not soon dial back its loose monetary policy.
The most-active March arabica coffee contract on ICE Futures US were up 0.45 cent, or 0.04 percent, at $1.0640 per lb by 12:25 pm EST (1725 GMT) on short-covering. Market movement this week has been choppy since the second month touched a nearly five-year low of $1.0415, under pressure from huge global supplies and expectations of another bumper crop in top grower Brazil
The spot December contract on ICE Futures US was up 0.55 cent, or 0.5 percent, at $1.0360 per lb, hovering near last week's 7-year low of $1.0095. "Any move up in coffee here is a dead-cat bounce," said Nick Gentile, senior partner of commodity trading consultancy Atlantic Capital Advisors. Dealers continued to eye a potential drop to the key psychological and technical support level of $1 per lb.
Liffe January robusta coffee was down $4, or 0.3 percent, at $1,461 a tonne, not far above last week's over three-year low of $1,431. Spot white sugar on Liffe dropped $7.40, or 1.6 percent, to $450.10 a tonne, having earlier touched $449.00. A December contract low and the weakest level in more than three years. The white premium traded below the $80 seen as viable for refineries to turn a profit. The front month's discount touched as low as $13.40 a tonne, its weakest against the second-month since December 2010.
ICE March raw sugar futures were down 0.09 cent, or 0.5 percent, at 17.71 cents a lb, just above a new six-week low of 17.70 cents touched earlier in the session. Raw sugar has fallen 12 percent since it hit a one-year peak above 20 cents on October 18, when worries over the fire drove a wave of short-covering. The International Sugar Organisation raised its forecast for a global surplus of 4.7 million tonnes in the 2013/14 crop year that began on October 1, up from a previous outlook of 4.5 million.
Rising output and expectations of another year of surplus drove front-month prices to three-year lows in July. ICE March cocoa reversed earlier losses and closed up $15, or 0.6 percent, at $2,680 a tonne as speculators on both sides defended their positions. March cocoa on Liffe edged up 3 pounds, or 0.2 percent higher, to finish at 1,711 pounds a tonne.