ICE arabica coffee futures rallied on chart-based buy signals on Friday as uncertainty over the extent of drought damage to Brazilian crops continued, keeping the market volatile, while ICE raw sugar jumped after tapping an eight-week low. ICE cocoa futures on ICE Futures US touched a near three-year peak in their strongest session in two months, supported by a strong consumption outlook.
Arabica coffee extended this week's gains and triggered technical buying by surging above the 100-day moving average, as all eyes remained on Brazil's harvest following a drought. September arabica futures on ICE settled up 1.75 cents, or 1 percent, at $1.7645 a lb. Total open interest rose for the sixth straight day on Thursday to 173,778 contracts, the highest since March 25, exchange data showed.
"The range of production estimates runs from less than 45 million to greater than 55 million bags. While the mathematical average of the guesstimates may be 50, there is no consensus," Volcafe, the Swiss-based coffee division of commodities house EDF Man, said in a note. Liffe's London-based robusta coffee for September rose $26, or 1.3 percent, to close at $1,998 a tonne. Raw sugar July futures on ICE saw their biggest daily gains in a month as traders reported the ship line-up waiting to export sugar at ports in top grower Brazil jumped nearly 50 percent from the prior week as export premiums also rose. The contract rose 0.34 cent, or 2 percent, to settle at 17.04 cents a lb, having earlier touched an eight-week low of 16.67 cents a lb.
Total open interest jumped by nearly 10,500 lots to a nine-month high at 879,976 lots on Thursday, ICE data showed. Liffe August white sugar jumped $10.00, or 2.2 percent, to end at $465.20 a tonne. Traders and analysts have forecast the sugar market may switch to a deficit in 2014/15 after several years of surplus. In cocoa, ICE's September contract closed up $41, or 1.3 percent, at $3,103 a tonne, after hitting a near three-year high of $3,125. Total open interest dropped for the fifth straight session on June 12. Major trade houses and chocolate makers predicted a global 2013/14 cocoa deficit at the World Cocoa Conference in Amsterdam this week, in line with the International Cocoa Organisation's expectation for a 75,000 tonne deficit. Liffe September cocoa finished up 9 pounds, or 0.5 percent, at 1,939 pounds a tonne.
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