NEW YORK/LONDON: Arabica coffee futures were lower on Friday, pressured along with the commodity complex by flat US jobs growth, but losses were pared by momentum from the previous 18 straight days of session highs.
Raw sugar also was pressured by the US employment report. The bleak jobs data fed fears there will be recession, which weighed on the commodity complex.
Cocoa futures closed slightly higher in choppy dealings, with upside potential limited by expectations of ample global supplies in 2010/11. US commodity markets will be shut Monday for Labor Day and ICE softs volume was light ahead of the holiday.
Arabica's losses were limited as Brazilian producers were reluctant to sell as they felt confident that the market was well supported by tight supplies of washed beans. Profit-taking after the market rose about 23 percent the past few weeks weighed, dealers said.
Harvesting of top producer Brazil's crop is near completion and output is expected to come in at the low end of expectations, which is helping support prices, dealers said. Market consensus is for a Brazil 2011 crop of around 46-48 million 60-kg bags.
December arabica coffee on ICE was down 1.15 cents at $2.8860 per lb at 12:15 p.m. EDT (1615 GMT) after touching $2.9085 on Thursday, the highest level for the second month since May 9.
November robusta coffee on Liffe was off $35 at $2,290 per tonne. Raw sugar futures slipped Friday in line with weakness induced by selling spawned by the weak US jobs report along with some investor sales. Losses were seen capped by lower than expected output from top producer Brazil, although some said this already appeared to be worked into the market
"Any time it gets up to 30 cents, it finds a new round of selling," said The Price Group analyst Jack Scoville. "Sugar just refuses to get with the program to the upside."
The market digested news that China's sugar demand could outpace output by more than 2 million tonnes in the year to September 2012 after a prolonged drought hit the growing region.
October raw sugar futures on ICE dropped 0.44 cent, or 1.5 percent, at 29.15 cents a lb, while October white sugar futures on Liffe fell $10.20, or 1.3 percent, to $752.60.
Reform of India's tightly controlled sugar sector will top the agenda of an international conference kicking off on Sept. 5, as traders and analysts call for changes to allow the country to become a regular exporter, competing with top producer Brazil.
"Sugar needs to see some more definitive information from India before we start whichever way our next move will be," said Sterling Smith, analyst with Country Hedging in Minnesota.
ICE cocoa futures were slightly higher, supported by an expected fall in world cocoa production in 2011/12, as the coming crop in West Africa faces less favorable weather than in the previous season. Gains were limited by a record global cocoa surplus in 2010/11. December cocoa on ICE settled up $23 at $3,098 per tonne, while Liffe December cocoa closed up 6 pounds at 1,951 pounds a tonne.
Copyright Reuters, 2011
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