ICE arabica coffee futures rose on Monday, quietly consolidating after falling to the lowest level in nearly five months last week, while raw sugar was mixed, with the benchmark contract also rising above a multi-month low. Cocoa futures crept lower following weak bean processing data in Malaysia and ahead of the second-quarter North American grind data due on Thursday.
The benchmark September arabica contract on ICE Futures US rose 2.95 cents, or 1.8 percent, to settle at $1.6435 per lb. "The sharp selloffs seen late last week (have) taken the market into an oversold condition and this is attracting some bargain hunting," said Sterling Smith, futures specialist for Citigroup in Chicago, in a morning report.
On Friday, the second-month contract fell as low as $1.5955, the lowest since February, when prices were in the middle of a sharp rally on concerns over drought-related crop damage in Brazil, the world's top producer.
"Brazil's harvest has been accelerating, and we are not hearing of any more damage to crops than had been previously thought," Birgit Wippler, soft commodities analyst with F.O. Licht, said. Liffe September robusta coffee ended up $26, or 1.3 percent, at $2,023 a tonne. Arabica's premium over robusta has dropped for the second straight session to around 66 cents per lb, the lowest since February 18.
In raw sugar, the most-active ICE October futures contract climbed 0.12 cent, or 0.7 percent, to close at 17.19 cents per lb, correcting up from the prior session's lowest level since February at 17 cents. The rest of the board was lower. Dealers talked of light buying as the market readjusted after Friday's Commitments of Traders data showed a 40 percent reduction in net long positions held by speculators.
Brokers talked of expectations of a light delivery of Thai sugar, and possibly some Brazilian sweetener, against expiry of the Liffe August white sugar futures contract on Wednesday. Liffe August white sugar finished down $1.40, or 0.3 percent, at $446.90 per tonne. In cocoa, ICE second-month futures edged down $7, or 0.2 percent, to close at $3,083 per tonne. Liffe September cocoa settled down 3 pounds, or 0.2 percent, to 1,922 pounds a tonne.
Traders turned their attention to the expected release of second-quarter North American cocoa grind data, a measure of demand, on Thursday, with estimates ranging from flat to up 3 percent. Cocoa grindings in Malaysia fell 9.9 percent from a year ago to 65,046 tonnes in the second quarter of 2014, the Malaysian Cocoa Board said on Monday.
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