ICE cocoa futures hit a near three-year peak on Friday on strong chart signals and falling exchange stocks, and raw sugar saw the biggest one-day rout since February on weak demand for physical delivery ahead of the July contract's expiry on Monday. ICE arabica coffee plummeted in the final hours of trade, giving back all of the week's earlier gains as buying spree dried up and sell-stops propelled steep losses.
Cocoa futures on ICE Futures US jumped to the highest level since August 2011 on the coattails of the London market after the triggering of "buy stops," or technical buying points, a London-based cocoa futures broker said. ICE September cocoa hit a peak of $3,138 and settled up $82, or 2.7 percent, at $3,135 per tonne. The second-month was on track for a fourth straight quarterly rise as traders have piled into the market on expectations of supply deficit.
Liffe September cocoa surged 49 pounds, or 2.6 percent, to finish at 1,958 pounds a tonne. Commercial buying on the price dips and a fourth straight drop in Liffe exchange inventories added to the buying, said Nick Gentile, managing partner of New York-based commodity trading advisor Nicene Capital. The spot July raw sugar contract on ICE tumbled in spread-related gyrations ahead of the July contract expiry on Monday. The July/October spread widened to 1.51 cents a LB, the biggest discount since December 2009.
The ICE July raw sugar contract plunged 0.72 cent, or 4.1 percent, to finished 16.85 cents a LB, while most-active October futures ended down 0.19 cent, or 1 percent, to 18.32 cents per lb as sell-stop order deepened losses. The front-month contract was on track for a 5 percent quarterly loss. The Liffe August white sugar slid $6.30, or 1.3 percent, to end at $481.10 a tonne.
In coffee, the benchmark ICE arabica contract dropped as an earlier rally lost momentum and sparked a wave of liquidation. Stop-loss orders exaggerated losses in light volume. The benchmark ICE September arabica contract plunged 8.3 cents, or 4.6 percent, to finish at $1.7255 per lb. The September Liffe robusta coffee contract edged up $7, or 0.3 percent, to finish at $2,034 per tonne.