Thursday, April 21, 2011

Arabica drifts from 34-year high, cocoa eases

* Coffee roasters seen buying hand-to-mouth - trade

* Sugar weighed by big Brazil crop, Thai supplies

* Cocoa trade focused on Ivorian midcrop flows

* Coming up: ICE softs closed Fri, Liffe Fri and Monday (Updates prices, adds volume)

By Marcy Nicholson and David Brough

NEW YORK/LONDON, April 21 (Reuters) - ICE arabica coffee futures closed weak on Thursday, after Wednesday's 34-year high was viewed as overdone, while cocoa fell in thin volume as dealers squared positions before the Easter holiday break.

Sugar inched higher in rangebound business.

"You're seeing a bit of a pull-back in the softs and the energy markets today, I think, just ahead of the long weekend," said Luis Rangel, vice president for commodity derivatives with ICAP North America in New Jersey. "Traditional buyers may be extending the weekend a day early."

ICE July arabica coffee dropped 4.9 cents or 1.6 percent to close at $2.9455 per lb, after climbing to $3.0055. The contract had risen above the psychological $3 level to peak at $3.025 a lb on Wednesday, supported by a shortage of mild washed arabicas and a weak dollar. Total volume was light at just over 11,000 lots, the lowest in seven weeks, preliminary Thomson Reuters data showed.

"If you see the kind of delivery notices that are being thrown out in the market, it definitely makes things a little bit heavy," Rangel said.

"When you see weakening spreads, you start to get concerned that the bull story is less convincing than it was."

On April 20, there were 1,608 delivery notices, the highest for the May contract in two years. There were more than 500 notices on Thursday, ICE data showed.

Dealers said the high prices were causing roasters to buy hand-to-mouth, eschewing longer-term forward coverage.

"There's more than enough coffee to fulfill demand ... It's just the crop of tenderable washed arabica coffee is small," a European trader said.

Liffe July robustas dropped $47 or 1.9 percent to close at $2,435 a tonne.

ICE Futures U.S. coffee, cocoa and sugar markets will be closed for Good Friday and the electronic platform will reopen late on Monday at 7:30 a.m. EDT (1130 GMT). Open outcry will see regular hours on April 25. The Liffe agricultural markets will be closed both Friday and Monday for the Easter holiday.

Cocoa futures eased in the lightest total volume since Dec. 28 at just over 7,000 lots, with eyes on top producer Ivory Coast where Belgian shipper Safmarine loaded its first cocoa exports there since the end of the country's export ban, the company's head of commodity sales said.

"I don't see shipping on a big scale until banks open and I don't see much on that front while it's still violent. Middle class Abidjan people aren't going to work yet," one New York dealer said.

U.S. cocoa futures ignored the sharply higher pound against the dollar as book-squaring ahead of the long weekend contributed to pressure on the market.

"Ghana sold yesterday and maybe today at the highs. Left over hedges are being put down which is why London is weaker than New York," the trader said.

ICE second-month, July cocoa closed down $18 at $3,088 per tonne, while London July cocoa fell 32 pounds to settle at 1,890 pounds per tonne.

"Now the question is, what will the arrivals be like in the next few weeks from the midcrop," said Keith Flury, a soft commodities analyst with Rabobank in London.

"The talk is that there is good supply from the midcrop -- some 250,000 to 300,000 tonnes of beans should make it to the ports -- so the price risk is to the downside."

Raw sugar futures on ICE turned higher in rangebound dealings after Wednesday's jump, with upside potential seen limited by expectations of ample production of the sweetener from Brazil and bumper supplies from major exporter Thailand.

"We expect the steadiness (in prices) to continue in the short term, but believe that, ultimately, supplies will increase and producer hedging will become heavier," said Nick Penney of brokerage Sucden Financial.

ICE July raw sugar futures rose 0.27 cent to finish at 23.80 cents. London August white sugar settled up 40 cents at $639.10 per tonne.

(Source: http://www.futurespros.com/news/softs-news/softs-arabica-drifts-from-34-year-high,-cocoa-eases-1000010430)

No comments:

Post a Comment