Liffe May robusta coffee ends up $95 at $2,557 a tonne on Wednesday after earlier rising to a three-year high for the second month of $2,586. Run-up in coffee prices led by ICE arabicas which surged to a fresh 34-year peak on Wednesday. Liffe May cocoa ends down 61 pounds at 2,259 pounds a tonne. Rally in cocoa prices driven by conflict in top grower Ivory Coast appears to have temporarily lost momentum.
Liffe May white sugar falls $12.00 to close at $751.10 a tonne. Market remains range-bound, turning lower after failing to breach resistance at the upper end of the current trading band. "The market is very stout and well supported," said Sterling Smith, a senior analyst for brokerage Country Hedging Inc in St. Paul Minnesota. "Beans remain in tight supply and combined with steady demand is creating plenty of room for speculators (to push coffee higher)."
Technically, the market is poised to carve out a topside breakout for arabicas. "The market is heading for the long-term channel resistance at 306 (cents a lb or $3.06)," technical analyst Stephanie Aymes of Societe Generale said in a market note. "The recent break above the steep bullish channel in place since last June highlights the strength of the uptrend."
Supplies of high quality arabica coffee had been tightened by a succession of below normal crops in key arabica producer Colombia. "Colombian production is slowly recovering from the low levels of the three preceding crop years and an increase is expected in crop year 2011/12," the International Coffee Organisation said on Wednesday.
Colombia is expected to produce around 9 million bags in 2010/11, up from around 8.1 million bags the previous season, the ICO said. But the crop remains significantly below the 12.5 million bags produced in 2007/08. Cocoa futures were hammered late by long liquidation which was triggered by the failure to carve out higher ground in a market that hit a 32-year peak due to the civil war in top producer Ivory Coast.
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