Liffe July robusta coffee rose $34 to close at $2,536 a tonne on Wednesday after setting a contract high of $2,555. Robustas finally gained some ground on the arabica market following a prolonged decline in its relative value. Liffe August white sugar fell $6.60 to close at $626.50 a tonne. The market was weighed down by expectations of ample output from Brazil and Thailand and the possibility of further unrestricted exports from India.
Liffe July cocoa ended 20 pounds higher at 1,927 pounds a tonne. Traders are monitoring the situation in top grower Ivory Coast, where the cocoa sector is set to resume operations within days following a violent post-election conflict. Trade sources cited stronger-than-expected sugar production in top grower Brazil and No 2 exporter Thailand as well as the prospect of further unrestricted exports from India.
Arabica coffee futures fell in choppy and light dealings but remained close to a 34-year top set a week ago, while cocoa jumped as the pound rallied and players awaited developments on further shipments and the mid-crop in top grower Ivory Coast. A sharp rise in output in Thailand had weighed on cash premiums and could lead to the delivery of Thai raws against the May raw sugar contract on ICE which expires Friday, dealers said.
Open interest in the May contract was above 50,000 lots by April 26. Uncertainty about the quality of Thai raws could weigh on nearby premiums, dealers said. "With the open interest where it is right now it looks like someone's going to stop New York," said Nick Gentile, head of trading at Atlantic Capital Advisors in New Jersey.
Dealers said fund and investors were increasingly dominating the market with trade participation on the wane, while roasters were waiting around $2.80. "Political instabilities in (top grower) Ivory Coast will remain an upside risk in the near term," Barclays Capital said in a report.