Robusta coffee rebounded in London on speculation investors are increasing bets on higher prices at a time when roasters are buying and stockpiles falling. Cocoa declined in London trading.
Robusta stockpiles have fallen 74 percent since reaching an all-time high of 417,420 metric tons in July 2011, according to NYSE Liffe data. Inventories were 106,540 tons as of Dec. 24. The exchange will update the data tomorrow. Money managers boosted bets on rising prices of robusta coffee by more than fourfold in the week ended Dec. 31, according to the exchange. Net-long positions rose to 3,805 futures and options from 905 contracts a week earlier.
“Technically and fundamentally robusta still looks bullish, and sell-offs like yesterday are a good buying opportunity,” Keith Flury, a commodities analyst at Rabobank International in London, said by e-mail today. “Roasters are interested in buying robusta, but mostly buying the dips, and speculators may add more length if prices keep the recent upward trend.”
Robusta for March delivery advanced 0.9 percent to $1,932 a ton by 11:05 a.m. on NYSE Liffe in London. Arabica coffee for March delivery slid 0.6 percent to $1.472 a pound on ICE Futures U.S. in New York.
Robusta dropped as much as 2.9 percent yesterday, while arabica futures traded on ICE fell as much as 3.2 percent on ample supplies, even as index funds are expected to buy the futures due to changes in weightings of commodity indexes.
White, or refined, sugar for March delivery was little changed at $506 a ton in London. Raw sugar for March delivery gained 0.2 percent to 18.70 cents a pound in New York.
“We are seeing a lot of offers on the VHP but not enough demand,” Luiz Carlos dos Santos Jr., head of sugar brokerage and operations at brokerage and consultancy SA Commodities, in Santos, Brazil, said in a report e-mailed yesterday, commenting on raw sugar. “That suggests we still have a lot of sugar to be shipped out of Brazil.”
Cocoa for March delivery was down 0.1 percent to 1,420 pounds ($2,280) a ton on NYSE Liffe. Cocoa for March delivery gained 0.1 percent to $2,218 a ton on ICE.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.