LONDON: Arabica coffee futures on ICE dipped to a 6-month low on Wednesday as the market extended its prolonged slide with funds liquidating long positions.
March arabica coffee was off 0.90 cent, or 0.7 percent, at a 6-month low of $1.3330 per lb at 1513 GMT. "We are still ultimately suffering from a pretty significant long liquidation exercise from the managed fund group. Industry continue to buy but are in a very comfortable position at the moment," one London dealer said.
Dealers said the bulk of the net long position held by speculators had now been liquidated.
Speculators had already cut a net long position to 14,817 lots by Dec. 20, down sharply from an 8-1/2 year high of 51,090 lots on Oct. 25. Robusta coffee futures were also lower as the market also took account of losses in the New York-based arabica market on Tuesday.
London-based contracts in robusta coffee, cocoa and white sugar had been closed on Tuesday.
March robusta coffee was off $8 or 0.4 percent at $2,081 a tonne. Dealers noted the open interest on January remained comparatively large ahead of first notice day on Jan. 3.
"That is really people's focus at the moment," one dealer said, adding the market would be keeping a close watch on what coffee was tendered next week. Raw sugar futures were higher with the market appearing to have built a base after a prolonged slide during the last few weeks.
March raws were up 0.28 cents, or 1.5 percent, at 18.82 cents a lb. The front month peaked at a two-week high of 18.94 cents on Tuesday.
Prices had slid from a peak of 23.90 cents on Oct. 6 to a low of 17.84 cents on Dec. 15. The decline had been driven by fund long liquidation against the backdrop of an improved supply outlook for the 2017/18 season. March white sugar futures rose $14, or 2.85 percent, to $505 per tonne.
New York cocoa futures were lower with March down $30 or 1.3 percent at $2,207 a tonne.
Dealers noted port arrivals in top grower Ivory Coast were now running significantly ahead of last season, reinforcing sentiment there is likely to be a significant global surplus in the current 2016/17 season.
March London cocoa fell 9 pounds or 0.5 percent to 1,807 pounds a tonne.
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