Coffee hits 5-1/2 years low, cocoa firms

Robusta coffee futures fell to a 5-1/2-year low on Tuesday on ample supplies from top grower Vietnam while cocoa extended gains on strong European grind data and short-covering after data showed speculators sharply cut their bullish stance. Sugar futures turned lower in choppy dealings as oil prices fell below $29 per barrel.
Dealers said Vietnam had just finished harvesting a good crop and had coffee left over from the prior season when farmers held back supplies hoping for a price rise that never materialised. Vietnam exported 2.5 million 60-kg bags of coffee in December, up 58.6 percent from November, customs data showed. Dealers said the pace of exports from Vietnam had remained strong this month as a weaker dong boosted returns in the local currency.
March robusta coffee settled down $8, or 0.6 percent, at $1,412 per tonne. The second month had slid to a low of $1,410, its lowest since June 2010. "The momentum indicators still point downward but show that contracts are oversold which could help prices steady," Sucden Financial Research said in a daily technical market report.
ICE March arabica coffee settled up 0.75 cent, or 0.7 percent, at $1.1565 per lb, supported slightly by data released late Friday showing speculators doubled their bearish position. Total open interest in arabica futures rose for the ninth straight session on January 15 to 198,693, the highest since November 13, exchange data showed. London cocoa futures rose, buoyed by tumbling sterling, a higher-than-expected rise in fourth-quarter European grind and a slowdown in Ivorian port arrivals. March London cocoa settled up 30 pounds, or 1.4 percent, at 2,144 pounds per tonne.
Expectations for the fourth-quarter North American cocoa grind data scheduled on Thursday ranged from 1 percent lower to 5 percent higher, with most approached by Reuters pegging it up 1 percent. March New York cocoa settled up $29, or 1 percent, at $2,934 per tonne in heavy volume, largely shrugging off the weak pound, typically a source of pressure.
Raw sugar futures turned lower after a choppy session, pressured by technical resistance around 15 cents per lb and weak oil prices, taking the March/May spread sharply lower to a 0.33-cent premium from a high of 0.51 cent in the last session. Raw sugar futures on ICE settled down 0.17 cent, or 1.1 percent, at 14.75 cents per lb. March white sugar futures settled down $1.50, or 0.4 percent, at $425.30 per tonne.