Soft commodity futures were mixed on Thursday in very thin business as most investors left for the Christmas and New Year holidays, with raw sugar on track for its lowest daily volume in three years. "It's slow all around. A lot of peoples' books are closed out. They are done for the year," Nick Gentile, the head of trading for commodity fund Atlantic Capital Advisors in New Jersey, said.
Analysts said the question facing players in the softs complex going into 2012 would be whether the recent boom in commodities is in cold storage for now given what happened with bankrupt MF Global and the debt/budget crisis roiling the EU and the United States. "We're going to see more redemptions. I think more money will come out. There's just too much uncertainty in the marketplace," Gentile explained.
ICE Futures US said on Wednesday that it plans to lower the minimum initial margin rate for speculative positions on its agricultural products by 35 percentage points in what one analyst said is an attempt to lure new business to the sagging softs complex. US commodity markets have shrunk almost 9 percent since MF Global's collapse, as farmers, investors and traders closed out positions, a Reuters data analysis showed.
For Thursday's session, sugar was steady, coffee was mixed and cocoa turned lower. New York's March raw sugar contract rose 0.12 cent to finish at 23.44 cents per lb. The March white sugar futures on Liffe gained $5.10 to close at $608.80 per tonne. Raw sugar volume was less than 24,000 lots, its lowest since December 24, 2008, preliminary Thomson Reuters data showed. Coffee and cocoa volume ranged from 40 to 65 percent under the 30-day norm, the data showed.
Coffee prices were mixed and cocoa weaker, with the same holiday malaise affecting both bean futures. In 2012, Brazil is set to overtake the United States as the world's biggest consumer of coffee, leaving less coffee available for export, Commerzbank said. ICE March arabica futures increased 1.50 cents to finish at $2.214 per lb. London March robusta coffee futures slipped $10 to end at $1,858 per tonne. Cocoa futures fell, weighed down in part by abundant West African supplies. ICE March was down $23 to conclude at $2,221 per tonne. London's March cocoa futures lost 21 pounds to end at 1,414 pounds a tonne.