* Sugar market focused on India export outlook
* US cocoa spread narrows on available supplies
* Arabica tumbles as origins sell (Adds analyst comment, arabica/raw sugar settlement, details, table)
By Marcy Nicholson and Sarah McFarlane
NEW YORK/LONDON, March 10 (Reuters) - Arabica coffee, cocoa and sugar futures slid more than the rest of the commodity sector on Thursday, on investment fund and stop-loss sales as the dollar strengthened, dealers said.
Arabica coffee futures tumbled off Wednesday's 34-year peak, closing down nearly 5 percent, while U.S. cocoa had its biggest three-day fall in two months, tumbling to the lowest level in a month in strong volume. Raw sugar slumped 5.6 percent.
"It's total liquidation all across the board," said Alex Oliveira, senior sugar analyst for brokerage Newedge USA.
Brent and U.S. crude oil futures closed down 1.6 percent, after paring earlier losses, beset by deeper geopolitical concerns on witness reports that police fired on protesters in Saudi Arabia's Eastern Province.
Coffee futures, viewed by some as overbought after nearing $3 per lb Wednesday, took a bigger hit on profit-taking than many other commodities as it had recently rallied hard to the highest level since 1977. Selling from multiple producing countries picked up as producers took advantage of the recent price rally, dealers said.
ICE May arabica coffee tumbled 14.30 cents, or 4.9 percent, to settle at $2.8055 per lb, with total volume just over 22,000 lots, a shade above average. This was well below the 34-year high of $2.9665 a lb touched on Wednesday.
"Technically, the market was overbought. Obviously, the trend is still up and the market will continue to find some underlying support on the near-term supply tightness," said Boyd Cruel, softs analyst for Vision Financial Markets in Chicago.
Liffe May robusta coffee traded down $49 to settle at $2,508 per tonne.
A potentially devastating storm is brewing in the world's physical coffee market, where a double whammy is hitting the companies that get beans from the farm gate to the cafe table.
Cocoa futures prices careened lower, marking the biggest three-day percentage loss in two months, extending their descent from last week's 32-year peak. Long liquidation triggered automatic sell orders, with total volume around 25,000 lots, the highest since Feb. 10. The May/July spread on the U.S. market tightened, an indication that supplies are available on the market, dealers said.
The strengthening dollar added to the downside momentum.
ICE May cocoa traded down $82, or 2.3 percent, to finish at $3,445 a tonne, after hitting a one-month low at $3,328.
The market pared losses in a technical bounce off key support at $3,320, basis May, causing some chart-based buying, Cruel said.
London May cocoa closed down 15 pounds at 2,244 pounds, after falling to a session low at 2,259 pounds.
Political tensions in top producer Ivory Coast continued to underpin prices as limited cocoa supplies make it out of the country onto the world market.
"Cocoa is a political risk trade. It's just going to whip around," a London-based analyst said. "You could lose your shirt on it in five minutes."
Dealers said the market would remain vulnerable to corrections, as it is expected to climb higher, with no sign of a peaceful resolution in Ivory Coast.
ICE raw sugar fell, with tight supplies and low stocks limiting losses.
Newedge's Oliveira said raw sugar, given the paucity of action in the physical sugar market, should probably be trading around 25 cents a lb.
ICE May raw sugar futures sank 1.71 cents, or 5.6 percent, to close at 28.71 cents per lb, while London May white sugar closed down $23.50, or 3.1 percent, at $727.60 per tonne.
The sugar market did not react to news that a committee of EU experts approved a 300,000-tonne import quota for raw and refined sugar with duties set at zero. Dealers said it was already priced in.
India must soon allow 500,000 tonnes of unrestricted sugar exports as bumper output can easily help the world's top consumer ship out 1.5 million tonnes more of the sweetener, industry officials said on Thursday.
No comments:
Post a Comment