Coffee up, sugar falls

Arabica coffee futures consolidated just above an 18-month low on Thursday, as many roasters sat on the sidelines and producers hoped for higher prices, while raw sugar fell to an 11-month low, bringing the May/July spread to a four-month low. Cocoa futures fell slightly on profit taking following a recent five-day streak higher, dealers said, while raw sugar was little changed at above an 11-month low hit earlier in the session.
Coffee roasters who already took advantage of cheaper prices were now well-supplied and had stopped buying, Stefan Uhlenbrock, analyst with Germany's F.O. Licht, said. "Demand has faded and this is obviously adding more pressure to the market," Uhlenbrock said. Arabica July futures on ICE inched up 0.65 cent to finish at $1.7565 per lb, trading just above Monday's 18-month low, second basis month, of $1.7390.
"The trade is really out of the market. Roasters are priced pretty far out. Producers are only selling if they really have to. Even hedgers have pulled back a little bit," said one US dealer. Open interest fell for five straight days, and was down 1,231 lots at 143,994 lots by April 18, the lowest in six weeks.
"Funds have got a large short position in New York and everybody's been expecting that sooner or later they must cover their positions and there will be a price spike but it hasn't happened," said one London-based broker. Benchmark Liffe July robusta coffee futures fell $6 to settle at $2,023 per tonne. Raw sugar futures slipped on speculative sales, even though it was given a temporary boost by news that a crop analyst in Brazil estimated the center-south cane crop much lower level than expected, traders said.
May sugar futures dipped 0.29 cent to close at 22.05 cents per lb, the lowest finish for the spot contract since May 2011. The most active July contract finished down 0.24 cent at 21.77 cents per lb. Cane analyst Canaplan forecast the 2012/13 cane crop at 470 million tonnes, much lower than most estimates the crush would top 500 million tonnes.
Benchmark London August white sugar futures slipped $4.30 close at $582.60 per tonne. Cocoa prices eased, trimming gains after rallying over the past week, with origins remaining on the sidelines, dealers said. The benchmark US cocoa contract was pressure by the firm dollar earlier, and saw sell-stops triggered below $2,232 and again around $2,218.