* Cocoa trade sidelined by de facto embargo in Ivory Coast
* Brazil rains disrupt early harvesting of 2011/12 cane crop
* Coffee underpinned by tight supplies of high quality beans
(Adds trade comment, byline, updates prices)
By Nigel Hunt
LONDON, March 24 (Reuters) - Arabica coffee futures fell on Thursday, retreating further from a 34-year peak set earlier this month as investors continued to scale back long positions in agricultural markets.
Cocoa futures were also lower, while sugar rose in a modest rebound from losses earlier in the week as the market eyed harvest conditions in top producer Brazil.
"We've already seen a huge amount of money exit agricultural markets (during the last few days)," a London-based fund analyst said, noting that investors' risk appetite had been diminished by the crisis in the Middle East and earthquake in Japan.
May arabica coffee fell 3.95 cents or 1.5 percent to $2.6465 per lb. The contract has lost more than 10 percent of its value since March 9, when it peaked at $2.9665 per lb.
July was off 3.90 cents at $2.6705 per lb, with a bearish target of $2.64 per lb remaining intact, Reuters market analyst Wang Tao said.
Dealers said, however, the market remained underpinned by tight supplies of high-quality beans.
"Fundamentally, there's a huge deficit predicted for next year (2011/12)," the fund analyst said.
Robusta coffee futures on Liffe also fell, with May down $37 or 1.5 percent at $2,501 a tonne.
RESTRICTED FLOW
Cocoa futures also suffered a setback as outside influences dominated, with trade involvement in Liffe futures limited by the severely restricted flow of cocoa onto the international market from top grower Ivory Coast.
"There's a lot of non-cocoa related trade making cocoa move," a London-based broker said.
Cocoa exporters dismissed on Tuesday a media report that some were preparing to resume payment of export taxes to Ivory Coast's Laurent Gbagbo, saying a de facto embargo on shipments was holding.
"They (industry) know there's cocoa there for them; it's just a matter of getting it moved. It's the unknown that people are certainly nervous with," said the broker.
May cocoa on ICE slipped $44 or 1.35 percent to $3,207 a tonne, while July cocoa on Liffe eased 19 pounds to 2,070 pounds a tonne.
Sugar futures were higher as the market awaited further indications on the crop outlook in centre-south Brazil, where rains have hindered the early 2011/12 harvest.
Meteorlogix reported on Thursday that showers were continuing across cane areas of Brazil.
"Since the second half of February, cloudy and rainy conditions have also affected cane growth, and this, added to the drought damage suffered at the end of last season, may have a negative impact on productivity at the start of the harvesting season," Sucden Financial said in a market note on Thursday.
May raws on ICE rose 0.32 cent or 1.2 percent to 26.90 cents a lb, while May whites on Liffe climbed $7.20 to $695.10 per tonne.
No comments:
Post a Comment