Arabica coffee futures on ICE rose to a 3-1/2 month high on Wednesday, resuming their rally to breach a key technical level, while cocoa also made gains on the coattails of larger commodity markets. Sugar closed moderately lower after trading both sides of the session.
September arabica coffee settled up 2.5 cent, or 1.8 percent, at $1.4035 per lb, after jumping to $1.412, the highest for the spot contract since April 19. Total arabica futures open interest fell for five straight sessions, while prices rallied 5.6 percent, to 213,961 contracts on Tuesday, the lowest since May 23, ICE data showed.
The spot contract resumed its rally to reach its 200-day moving average at $1.4057, but it ran out of steam just above this level. September robusta coffee settled up $35, or 1.7 percent, at $2,145 per tonne. The rise came after buy stops were triggered in robusta, said Boyd Cruel, commodity broker at High Ridge Futures in Gilbert, Arizona.
September New York cocoa settled up $32, or 1.6 percent, at $2,055 per tonne. Total open interest fell for the third straight session, reaching 762,626 lots on Tuesday, when the spot contract rose to a four-month-high at $2,090,ICE data showed. September London cocoa settled up 19 pounds, or 1.2 percent, at 1,580 pounds per tonne. A rally in larger commodity markets, led by gains in energy markets, provided spillover support. Worries that the cocoa crop may be damaged by rain sent prices rallying, said Peter Mooses, senior market strategist of RJO Futures in Chicago. "But we're still not seeing carryover from companies saying demand is any better," Mooses said, referring to Nestle reporting slower sales growth. Market participants holding short positions exited their positions, boosting prices higher, he added.
Ivory Coast's prime minister fired the head of the Coffee and Cocoa Council owing to a crisis over cocoa contract defaults and other management issues, sources said on Tuesday. October raw sugar settled down 0.09 cent, or 0.6 percent, at 14.79 cents per lb. Erratic monsoon rains in India, the world's second-biggest sugar grower, caused flooding in some areas while others experienced a drought, caused indecisive trading, Mooses said. "They're probably waiting to see if the areas will benefit or get hurt," he said. October white sugar settled down $2.20, or 0.6 percent, at $397.10 per tonne.