Arabica and robusta coffee futures rose to 18-month highs on Thursday but then went separate ways, as robusta extended its longest streak of gains since May 2012 amid bullish fundamentals, while arabica turned negative. Raw sugar and cocoa on ICE Futures US fell. ICE November robusta coffee rose for the seventh straight session, its longest such streak in more than four years. It settled up $15, or 0.8 percent, at $1,927 a tonne after rising as high as $1,929 per tonne, the highest level since February 2015.
The robusta market has been boosted by poor crops in Brazil and Indonesia and the prospect of a drop in production this season in top grower Vietnam. "That's where the real tightness is right now," Nick Gentile, managing partner of commodity trading adviser NickJen Capital in New York, said of the robusta market. "Brazil still has problems, they're not getting rain."
Coffee sales in Vietnam's domestic market have been rising in the past few days on higher prices, tracking gains in the global futures markets, traders said on Thursday. But the relative strength index for second-month robusta, an important technical indicator, touched 73.219 on Thursday, placing the market in technically overbought territory. "Technically the markets, both New York and London, are getting overbought, and we can get a little bit of a correction," Gentile said.
Arabica coffee rose as high as $1.557 a lb, its highest since February 2015, but could not hold its gains and settled down 0.2 cent, or 0.1 percent, at $1.549 per lb. The arabica supply situation is not nearly as bullish as robusta, traders said, citing ample inventories in consuming countries. Raw sugar futures were lower but remained well within the recent range of about 19.50 cents to 21 cents, which has now held for more than a month.
October raw sugar fell 0.07 cent, or 0.3 percent, to settle at 20.22 cents a lb while October whites rose $3.30, or 0.6 percent, settling at $541.40 a tonne. Cocoa futures were lower as an improving outlook for main crops in West Africa, where the majority of the world's cocoa is grown, after recent rains helped to keep the market on the defensive. December London cocoa settled down 7 pounds, or 0.3 percent, at 2,263 pounds a tonne while December New York cocoa settled down $24, or 0.8 percent, at $2,885 a tonne.