Arabica coffee slips

November 02, 2012

RECORDER REPORT

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Arabica coffee futures dropped to the lowest level in more than four months on Thursday, on pressure from the firm US dollar and as chart-based selling was triggered below the previous low, while robusta coffee was firm, sitting just above a six-month low.

Sugar futures also eased while cocoa crept higher, finding strong support at the 200-day moving average. "You have a lot of fund managers and fund types who can't get into their offices and are working as best they can remotely," said Sterling Smith, futures specialist at Citigroup in Chicago. After the market closed, ICE said one certified coffee warehouse in New Jersey reported water damage following the severe storm, causing the exchange to flag its roughly 35,000 60-kg bags of arabica beans as non-deliverable, pending further notice.

December arabica coffee futures closed down 1.2 cents, or 0.8 percent, at $1.5345 per lb, the weakest settlement for the spot-month since June 20. The contract extended its losses on chart-based selling after falling below the previous session's low of $1.5440. The strong dollar also pressured prices. The euro slipped against the dollar after a Greek court ruled the country's pension reform demanded by foreign lenders may be unconstitutional, stoking worries about Athens' ability to implement austerity measures needed to secure aid.

January robusta coffee futures settled up $16, or 0.8 percent, at $1,984 a tonne, after touching $1,965 on Wednesday, the lowest level for the second-month since April, under pressure from ample Vietnamese supplies. Robustas from Vietnam changed hands at discounts to London futures this week as the harvest progressed, while tight supply and sporadic demand from exporters kept Indonesian beans at premiums for prompt shipment, dealers said on Thursday. March sugar futures turned lower in an inside session, closing down 0.08 cent, or 0.4 percent, at 19.38 cents a lb, as dealers said lower prices encouraged some end-user pricing.

December white sugar on Liffe settled down $3.20, or 0.6 percent, at $538.60 per tonne. December's premium over March remained firm at $18.50 per tonne in the lead up to December's expiry on November 15. ICE December cocoa closed up $32, or 1.3 percent, at $2,420 per tonne, holding firm above the 200-day moving average at $2,351. Benchmark Liffe March cocoa futures finished up 12 pounds, or 0.8 percent, at 1,560 pounds per tonne, remaining stuck within the range the market has traded in since December. The session low sat at 1,537 pounds, just above the 200-day moving average at 1,536 pounds.