Cocoa Futures Bounce From Lows
LONDON - Cocoa futures bounced higher on Tuesday, partly due to industry buying, and were seen well-supported after hitting lows in London and New York on Monday.
Coffee futures traded lower, weighed by renewed uncertainty over the outlook for the global economy, while sugar remained rangebound supported by trade, fund and investor buying, dealers said.
The euro rose against the dollar as equity markets stabilised after steep losses in Asia and the U.S., but investors remained cautious ahead of Wednesday’s U.S. Federal Reserve policy meeting.
The slightly weaker dollar and pound make dollar and sterling-denominated futures better value in terms of other currencies.
Cocoa dealers said the market was set for a recovery, having been on a downward trend since June 10.
“I think the market was due a bit of a bounce,” a cocoa trader said. “There’s big support in London and quite a bit of industry around these levels.”
London September cocoa was up 9 pounds at 1,592 pounds a tonne at 1251 GMT, after touching a low of 1,578 pounds a tonne on Monday, the lowest level for the second month since mid-December 2008.
September cocoa on ICE was up $9 at $2,489 a tonne, having hit a session low of $2,472 a tonne earlier.
“Technically we are on quite a key level of support and I think the longs will protect it and industry needs to buy, so I think the market will come up from here,” the trader said.
“I think London’s leading the way,” he said, adding there is investor and fund interest in the market.
Downward trend
Coffee futures were pushed lower by renewed concerns about the outlook for the global economy.
“It’s just a general economic picture, everything took a bit of a hammering yesterday,” a coffee trader said. “The bearish sentiment is generally there.”
London robusta coffee futures for September were down $20 at $1,359 per tonne, having sunk to $1,330 on Friday, the lowest level for the benchmark second month since the contract was relaunched in January 2008.
New York’s September arabica contract was down 0.85 cents at 1.11960 per lb.
The London-based trader said coffee futures need to go through a period of consolidation.
He said there was a bit of origin selling, and a lack of buying at present.
However, coffee sales in Vietnam are expected to pick up this week after domestic prices, tracking gains in London, rose 2.5 percent on Tuesday from late last week, traders said.
Sugar futures edged up slightly.
“We’ve moved away a little bit from following the wider commodity picture,” a sugar trader said. “Recently the market has been caught in a slightly tight range.”
ICE October raw sugar was up 0.41 cent at 16.65 cents per lb, while July was up 0.41 at 15.49 cents. London August white sugar was up $11.10 at $434.00 per tonne.
“The bigger factor remains we still have a positive set of fundamentals underlying the market,” the trader said, referring to a buoyant South Asian appetite for the sweetener.
“There’s good underlying trade buying and also support from some of the funds just looking to hold the market on the dips.”
Dealers also said they were keeping an eye on the slow progress of the monsoon in India, which has swung to a net importer from a net exporter of sugar.
Coffee futures traded lower, weighed by renewed uncertainty over the outlook for the global economy, while sugar remained rangebound supported by trade, fund and investor buying, dealers said.
The euro rose against the dollar as equity markets stabilised after steep losses in Asia and the U.S., but investors remained cautious ahead of Wednesday’s U.S. Federal Reserve policy meeting.
The slightly weaker dollar and pound make dollar and sterling-denominated futures better value in terms of other currencies.
Cocoa dealers said the market was set for a recovery, having been on a downward trend since June 10.
“I think the market was due a bit of a bounce,” a cocoa trader said. “There’s big support in London and quite a bit of industry around these levels.”
London September cocoa was up 9 pounds at 1,592 pounds a tonne at 1251 GMT, after touching a low of 1,578 pounds a tonne on Monday, the lowest level for the second month since mid-December 2008.
September cocoa on ICE was up $9 at $2,489 a tonne, having hit a session low of $2,472 a tonne earlier.
“Technically we are on quite a key level of support and I think the longs will protect it and industry needs to buy, so I think the market will come up from here,” the trader said.
“I think London’s leading the way,” he said, adding there is investor and fund interest in the market.
Downward trend
Coffee futures were pushed lower by renewed concerns about the outlook for the global economy.
“It’s just a general economic picture, everything took a bit of a hammering yesterday,” a coffee trader said. “The bearish sentiment is generally there.”
London robusta coffee futures for September were down $20 at $1,359 per tonne, having sunk to $1,330 on Friday, the lowest level for the benchmark second month since the contract was relaunched in January 2008.
New York’s September arabica contract was down 0.85 cents at 1.11960 per lb.
The London-based trader said coffee futures need to go through a period of consolidation.
He said there was a bit of origin selling, and a lack of buying at present.
However, coffee sales in Vietnam are expected to pick up this week after domestic prices, tracking gains in London, rose 2.5 percent on Tuesday from late last week, traders said.
Sugar futures edged up slightly.
“We’ve moved away a little bit from following the wider commodity picture,” a sugar trader said. “Recently the market has been caught in a slightly tight range.”
ICE October raw sugar was up 0.41 cent at 16.65 cents per lb, while July was up 0.41 at 15.49 cents. London August white sugar was up $11.10 at $434.00 per tonne.
“The bigger factor remains we still have a positive set of fundamentals underlying the market,” the trader said, referring to a buoyant South Asian appetite for the sweetener.
“There’s good underlying trade buying and also support from some of the funds just looking to hold the market on the dips.”
Dealers also said they were keeping an eye on the slow progress of the monsoon in India, which has swung to a net importer from a net exporter of sugar.
quoted from: Khaleej Times
