Liffe August white sugar closed little changed on Friday, down 30 cents at $582.00 per tonne, having traded near an 8-month low, pressured by expectations of ample supplies from Brazil and Thailand. Liffe July robusta coffee edged up $16 to close at $2,598 per tonne. Prices bolstered by a recovery in ICE arabicas, which were in sight of a 34-year peak touched earlier this week.
Liffe July cocoa ends 5 pounds higher at 1,890 pounds a tonne. Dealers are focused on the flow of West African mid crop cocoa to the ports. Arabicas extended gains but remained below a 34-year high touched earlier in the week, while cocoa reversed early losses with a focus on the resumption of exports from Ivory Coast after a power struggle in the top producer had paralysed trade. Brent oil prices and world stocks rebounded on Friday after US data showed jobs growth accelerated in April, tempering concerns that the recovery in the world's biggest economy was stalling.
Gains in sugar futures were limited by bearish market fundamentals due to an expected record Thai crop and a Brazilian harvest that is gathering speed, dealers said. "The fundamentals of sugar have changed," said Pierre Sebag of London-based consultancy Sugar K, referring to expectations the global sugar market, characterised by low stocks and tight supplies a few months ago, will swing into surplus.
Sebag said that if raw sugar drops below 20 cents a lb, the market risked a further selloff. "If sugar breaks below 20 cents, psychologically it will be very negative." Macquarie Bank said in a report on soft commodities: "We would expect strong resistance at 20 cents a lb, a level below which additional sugar production would be seriously impaired."
Thomas Kujawa of brokerage Sucden Financial said, "We are now at price levels where producers are starting to talk about cost of production." "The sentiment in the market is still that there's a lot of cocoa in Ivory Coast and it will come out," a Europe-based trader said. Ivory Coast will resume cocoa beans exports on Saturday, more than three months after they were halted by the West African country's post-election political crisis, industry officials said on Friday.