NEW YORK/LONDON: Arabica coffee futures trading on ICE jumped 3 percent on Monday, in sympathy with other markets on hopes of a solution to the euro zone debt crisis, while cocoa closed around three-year lows on near-term ample supplies.
Sugar was firm.
Confidence that European leaders will come up with a credible plan to lead the region out of its debt crisis at a crucial summit this week lifted world stocks.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, inched up around 0.2 percent.
Arabica coffee prices jumped, but remained stuck in a two-month range from $2.23-$2.55 per lb, basis March, supported by a softer dollar and investor buying. Diminishing crop prospects in countries including Colombia have been viewed as bullish while rising certified stocks have added mild pressure.
Hopes of a solution to the euro zone crisis gave underlying support.
March arabica coffee on ICE was up 7.65 cents, or 3.3 percent, at $2.3720 a lb by 12:51 p.m. EST (1751 GMT).
"We're going to continue to see these upward thrusts because there's not going to be a lot of arabica around," said Shawn Hackett, president of Hackett Financial Advisors in Florida.
Workers at Brazil's largest port, Santos, are planning to stage an unlimited strike from Dec. 12, the Sindaport union representing them said, over the government's refusal to improve pay and conditions.
The planned strike was seen added a mild bullish element to the market.
"Trade in arabicas futures is expected to be rangebound for a bit longer," said Keith Flury, a senior soft commodities analyst with Rabobank.
In the robusta coffee market, sales from Vietnam may be restricted by labor constraints and volatile prices, dealers said.
Ample robusta supply, uncertainties over a plan by major producer Vietnam to stockpile to prevent another price fall and the demand outlook at a time of global economic slowdown will take centre stage at an industry conference this week.
Flury said he saw near-term downside price risk in robustas into the first quarter of 2012 due to the pressure of the harvest in Vietnam.
March robusta coffee on Liffe settled up $51, or 2.6 percent, at $2,040 a tonne.
Speculators added net short futures positions in NYSE Liffe cocoa and feed wheat, while cutting their net short futures position in robusta coffee in the week to Nov. 29, exchange data showed on Monday.
PLENTIFUL COCOA
Liffe cocoa futures closed at the lowest level in three years, while ICE cocoa dropped to the lowest in more than 2-1/2 years, weighed by large supplies, but the US market reversed slightly higher with a lift from the firm sterling.
"Specs don't want to buy because they realize that the fundamentals are bearish," Flury said.
March cocoa on ICE eased $22 to close at $2,206 a tonne, the lowest settlement for the second-month contract December 2008. London March cocoa closed down 15 at 1,420 pounds per tonne, its weakest finish since November 2008.
Continued hot and dry weather in western Ivory Coast, a key cocoa growing region, heightened worries among farmers that supply could drop off starting early next year.
Raw sugar futures climbed on investment fund buying as the weaker dollar and the macro economic environment seemed to support the commodity sector this week.
"The macro (situation) is supportive to commodities," said Mike McDougall, vice-president for brokerage Newedge USA. "The dollar's also a bit weaker."
"Expectations of big northern hemisphere crops, including a record French beet crop, limited potential upside in prices.
Benchmark March futures gained 0.54 cent, or 2.3 percent, at 23.99 cents a lb, while March white sugar futures on Liffe ended up $10.80, or 1.8 percent, at $624.40 per tonne.
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