Arabica coffee rises

US arabica coffee futures rebounded modestly on Tuesday after falling to a 17-month low in the prior session, while cocoa markets pared their losses and sugar edged up. May arabica coffee futures on ICE climbed 1.3 cents, or by 0.7 percent, to settle at $1.8615 a lb. The market consolidated in quiet trading after falling roughly 24 percent in the past two months.
"It's because it fell so much. It's just a case of some bargain hunting," Macquarie analyst Kona Haque said of the rise in arabica prices.
The premium of arabica over Liffe robusta inched higher to around 96 cents per lb, after falling to a 1-1/2-year low just above 93 cents on Monday.
Dealers said the strength reflected profit taking on short positions, with the relative strength index showing the market remained technically oversold following a prolonged slide that saw prices dip to a 17-month low for the second position of $1.8105 on Monday.
The May robusta contract on Liffe fell $14, or 0.7 percent, to end at $1,972 per tonne. "I would have thought that the market has probably got itself back into a range where it's quite happy to stay at the moment... It's likely to just hold in this range for the time being," one London broker said. Traders said discounts to London coffee futures prices narrowed in Vietnam after global prices slid overnight, putting exporters and domestic speculators on hold.
Cocoa was weak but well above its session lows as origin sellers entered the market.
"It's difficult to be bullish cocoa. The weather looks good in Ivory Coast," said one veteran cocoa dealer in New York.
"In Ghana, they're trying to make room for what will be unavoidably smuggling from Ivory. The premium in Ghana verses Ivory Coast is very high at the moment at the farmer level."
May cocoa futures on ICE closed down $11 at $2,372 a tonne as the market consolidated further after last week's run-up. The opening times for ICE coffee and cocoa futures, and the settlement window for cocoa are delayed through March 23, due to the start of Daylight Savings Time in the United States.
"Funds are a little bit short as well, so technically it's looking like it's run out of a bit of steam to the upside so it's all pointing downwards for the time being," a London-based cocoa trader said.
May cocoa on Liffe settled 11 pounds lower at 1,537 pounds a tonne.
London May white sugar futures rose $9.60, or 1.5 percent, to settle at $641.30 per tonne.