Robusta coffee fell in London on speculation investors will continue to sell the futures just as crops start being harvested in Brazil and Indonesia, the second- and third-biggest growers of the variety. Cocoa rose.
Money managers reduced bets on higher prices of robusta coffee traded on NYSE Liffe in London for a second week in the seven-day period ended April 2, the exchange said on its website yesterday. The harvest in Indonesia starts this month, while producers in Espirito Santo, Brazil’s largest robusta growing state, had already started to gather beans, Cepea, a University of Sao Paulo research group, said in a report on March 26. Robusta beans in Brazil are known as conillons.
“Robusta is under pressure from the sizable managed long and the increasing appetite to add to short positions,” Alex Parry, a London-based futures broker at ABN Amro Markets U.K. Ltd., said by email today. “Roasters have bought well and are now in a more comfortable position.”
Robusta coffee for delivery in July slid 0.4 percent to $2,047 a metric ton by 11:06 a.m. on NYSE Liffe in London. Arabica coffee for delivery in May was little changed at $1.3595 a pound on ICE Futures U.S. in New York. It fell 3 percent yesterday.
Money managers reduced bets on higher robusta coffee prices by 23 percent in the week to April 2, NYSE Liffe said in its Commitment of Traders report yesterday. The net-long position fell to 24,632 futures and options from 32,188 a week earlier.
Robusta coffee gained 6.4 percent so far this year partly on speculation dry weather in Vietnam, the top grower of the variety used in instant coffee and espresso, would damage the crop. The nation’s main growing region of Dak Lak will continue to receive scattered showers this week, Nguyen Dai Nguong, head of the Meteorology and Hydrology Department, said yesterday.
“The proximity of the harvest in Indonesia and of the conillon crop in Brazil, as well as the prospects for rains in Vietnam should remove the support from the Liffe contract and bring more offers from the main origins,” Rodrigo Costa, a trading director at Caturra Coffee Corp., wrote in an April 7 report for Sao Paulo-based Archer Consulting, where he is a contributor.
White sugar for August delivery was little changed at $492 a ton on NYSE Liffe. Raw sugar for July delivery was 0.2 percent lower at 17.66 cents a pound on ICE.
Cocoa for July delivery gained 0.1 percent to 1,473 pounds ($2,255) a ton in London. Cocoa for July delivery was 0.2 percent higher at $2,211 a ton in New York.
Cocoa for May delivery in London was 3 pounds a ton more expensive than the futures for July yesterday, reversing a discount of 12 pounds a ton a week ago. That market structure, in which earlier-dated contracts are more expensive than later ones, is known as backwardation and may signal limited supplies. The May and July futures were trading at the same price today.
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.