Robusta coffee at 14-month low

Liffe's robusta coffee futures fell to the lowest level in more than a year on Friday on harvest pressure in top grower Vietnam, while arabica reversed higher in late dealings after feeling earlier pressure from the strong US dollar. Cocoa and sugar futures were little changed in lacklustre dealings as both markets appeared to be near a bottom.
London March robusta coffee futures closed down $54, or 3 percent, at $1,720 per tonne, having earlier touched a 14-month low of $1,717 per tonne, basis second month, pressured by a big harvest in top producer Vietnam. The market fell for the third straight day as dealers anticipated Vietnamese origin selling ahead of the new year festival that will begin January 23 and last for a week.
ICE March arabica futures eased, weighed by the stronger dollar, after their biggest fall in more than two months on Thursday, driven by investor sales. They reversed late-day to settle up 2.20 cents, or 1 percent, at $2.2175 per lb in choppy dealings. "Other than the dollar, I'm fundamentally bullish and from what I hear, everyone else in the physical market is bullish," said one US dealer active in both futures and cash coffee markets.
Coffee's fundamentals are bullish early in 2012 due to weather-related problems in major washed-arabica producer Colombia, which have led to reduced crop forecasts. The US Climate Prediction Center warned on Thursday that La Nina, the weather phenomenon blamed for searing drought in the southern United States and South America, may last longer than expected into the Northern Hemisphere spring.
ICE benchmark raw sugar futures inched up 0.16 cent, or 0.7 percent, to finish at 23.29 cents a lb, well below Wednesday's even-week peak of 24.65 cents per lb. Sugar futures tumbled more than 5 percent on Thursday after hitting a wave of sell-stops. India extended the deadline for mills and factories to apply for sugar export permits, the government said, a move expected to boost sluggish exports from the world's second biggest producer.
"I am bearish in the first half of the year but bullish in the second half. I don't think the Brazilian crop will increase as much as some people are expecting," said Kona Haque, a soft commodities analyst with Macquarie Bank. ICE March cocoa futures finished flat at $2,028 per tonne in quiet dealings, with upside potential limited by plentiful African supplies. London March cocoa closed up 3 pounds at 1,335 pounds per tonne.