Robusta coffee fell to the lowest level in more than a week in London on speculation investors will continue to sell the futures, boosting a discount between the May and July contracts on NYSE Liffe. Cocoa dropped.
Robusta coffee for May delivery was cheaper than the futures for July, reversing a premium a month ago. That market structure, in which earlier dated contracts are cheaper than later ones, is known as contango and may indicate ample supplies. Money managers reduced bets on higher prices of robusta coffee traded on NYSE Liffe for a second week in the seven-day period ended April 2, the exchange said on its website two days ago.
“Roaster buying is slow and there is some managed money liquidation weighing on the market,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, wrote in a daily report e-mailed yesterday.
Robusta coffee for delivery in July slid 0.4 percent to $2,028 a metric ton by 10:23 a.m. on NYSE Liffe, the lowest for a most-active contract since April 2. Arabica coffee for delivery in May gained 0.1 percent to $1.355 a pound on ICE Futures U.S. in New York. It fell 0.4 percent yesterday.
Money managers reduced bets on higher robusta coffee prices by 23 percent in the week end April 2, NYSE Liffe said in its Commitments of Traders report. The net-long position fell to 24,632 futures and options from 32,188 a week earlier. Robusta futures for May were $47 a ton cheaper than the July contract. A month ago, they were at a premium of $2 a ton.
Traders are turning to beans from Indonesia, the third- largest grower of robusta beans, as the harvest there starts this month. Sales in top grower Vietnam are “slow” because premiums in the physical market are “unattractive,” Nguyen Chi Cuong, chief executive officer at trading company NC Group Ltd., which has offices in Ho Chi Minh City, Vietnam, said in an e- mail today. Vietnamese beans are offered at a premium of $50 a ton to Liffe, he said.
“Vietnamese product movement has turned sluggish as cash buyers have become more willing to buy cheaper Indonesian robusta,” Citigroup’s Smith said.
White sugar for August delivery was down 0.1 percent to $491 a ton on NYSE Liffe. Raw sugar for July delivery rose 0.2 percent to 17.76 cents a pound on ICE.
Cocoa for July delivery slid 0.4 at 1,480 pounds ($2,267) a ton in London. Cocoa for July delivery was down 0.2 percent to $2,229 a ton in New York.
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.