* Focus on unseasonal rains in top cocoa grower Ivory Coast
* Tightening supplies seen in sugar - trade
(Adds trader comment, updates prices)
By David Brough
LONDON, Jan 7 (Reuters) - Coffee futures fell on
profit-taking in light volumes on Wednesday after a rally on
Tuesday, while cocoa rose on arbitrage driven by a weak dollar
and sugar was little changed in two-way investor dealings.
Coffee prices were lower as the market slipped back slightly
after Tuesday's strong advance.
March arabica futures on ICE were off 0.45 cents at $1.1565
per lb at 1314 GMT. The contract soared 8.40 cents or 7.8
percent on Tuesday to close at $1.1610 per lb, the highest close
since November 28.
"Today the market is consolidating a little bit. It is just
doing exactly what it should do, taking a rest to get more fuel
and more momentum on the upside," one dealer said.
Dealers said light profit-taking weighed on prices.
Robusta coffee futures in London were also lower with March
down $21 or 1.3 percent at $1,652 a tonne. The contract rose
$103 or 6.9 percent on Tuesday.
Dealers said the premium for January had risen to more than
$300, boosted by concern about whether sufficient tenderable
supplies will be available to deliver against the still large
open position.
There were just 104 lots graded on Tuesday, bringing this
month's tenderable total to 240 lots, according to exchange
data. The open position on January remains above 15,000 lots.
"I think people are very concerned about gradings," one
dealer said, adding, however, that the pace may pick up around
the middle of this month.
January was off $5 at $1,945 a tonne.
Cocoa rose in a market dominated by arbitrage dealings,
dealers said.
"It's all to do with the weak dollar driving New York
higher," one London cocoa dealer said.
ICE March cocoa was up $54 or 2.1 percent to $2,622 per
tonne at 1321 GMT, while London May cocoa was up $10 or 0.6
percent to 1,779 pounds per tonne.
Market fundamentals were constructive as attention focused
on the pace of bean arrivals to West African ports and a weak
pound before a likely chunky UK rate cut on Thursday.
Dealers said the pace of bean arrivals had picked up lately
after a slow start last year, and attention focused on
unseasonal rains in top producer Ivory Coast, which augured well
for the development of a crop that has so far disappointed.
Cocoa arrivals at ports in top producer Ivory Coast were
530,000-550,000 tonnes between Oct. 1 and Dec. 31 2008, compared
with 800,000 tonnes in the same period of the previous year, the
sector chief said on Wednesday.
Many traders believe that 2008/09 will be another global
deficit year for cocoa.
Sugar futures were little changed in two-way investor
dealings, erasing earlier losses as the dollar weakened against
the euro.
Dealers said the market for the sweetener appeared to be
tightening due to pressure on supplies, signalling higher prices
in the medium term.
ICE March raw sugar futures were down 0.05 cent or 0.4
percent to 12.22 cents per lb at 1319 GMT.
Dealers pinpointed nearby resistance at 12.50 cents per lb.
London March white sugar was up 60 cents or 0.2 percent to
$336.00 per tonne.
The sharp drop in crude oil prices and the global financial
crisis is set to disrupt the development of biofuels in the
European Union, a top European Commission official said on
Tuesday.
(Additional reporting by Nigel Hunt in London.)
(Reporting by David Brough; editing by William Hardy)
- 
- 
- 
Welcome,
Guest!
News
