Arabica coffee futures soared to a 34-year high Monday on investment fund buying as tight supplies and a paucity of producer sales ignited the market's most powerful rally since the end of January. Cocoa futures moved higher as fighting escalated in top producer Ivory Coast while sugar rose in consolidation business.
Volumes in US soft commodities were light, with sugar and cocoa running over 50 percent below their 30-day norms and even arabica coffee volume standing at a quarter below the norm, Thomson Reuters data showed. ICE's May arabica coffee futures jumped 8.35 cents or by 3 percent to close at $2.8115 per lb, the highest settlement in 34 years and the biggest percentage gain for the second position coffee market since January 28.
Technically, buying came into the market after breaching Friday's peak at $2.792, dealers said. "As soon as the market broke those highs, there was new buying coming in so the technical picture looks like it's going up," De La Roche said. A bitter power struggle in top cocoa producer Ivory Coast kept cocoa near 32-year highs. But cocoa supplies remain plentiful.
New York's May cocoa contract rose $5 to settle at $3,662 per tonne. Sugar prices were also higher, with whites particularly strong as it caught up with gains in ICE raws late on Friday after the Liffe market had shut down for the week. New York's May raw sugar contract gained 0.11 cent to close at 29.99 cents per lb.
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