Robusta coffee climbed to the highest in almost three weeks in London on speculation prices that fell in the last quarter by the most since 2011 slipped too far, amid declining stockpiles in Europe and high premiums in growing nations. Cocoa slipped.
Futures tumbled 14 percent from April to June, the worst quarterly loss since the third quarter of 2011. Stockpiles with a valid grading certificate in warehouses monitored by NYSE Liffe fell 1.3 percent to 119,580 metric tons in the two weeks to June 24, exchange data showed. Beans from leading grower Vietnam and third-ranking Indonesia were trading at a premium to the exchange price last week, according to Volcafe Ltd.
“It’s still predominantly technical trade after the losses we’ve seen,” Andrea Thompson, the Belfast, Northern Ireland-based head of research and analysis at CoffeeNetwork, a unit of INTL FCStone Inc., said by phone today. There’s “really light support from the fact that certified stocks eased at the end of last week. That would be the only support from fundamentals.”
Robusta coffee for September delivery gained 1.5 percent to $1,811 a ton by 10:55 a.m. on NYSE Liffe in London. Prices, which gained 1.5 percent yesterday, touched $1,812, the highest for a most-active contract since June 12. Arabica coffee for delivery in September gained 1.2 percent to $1.2305 a pound on ICE Futures U.S. in New York.
“The scope for downside potential is greatly reduced from a week ago,” Thompson said, adding that the market was testing the upside on the $1,800 a ton level. “The negative fundamentals some say have already been factored in the price and therefore we don’t have much further to fall.”
Coffee from Indonesia was last week at a premium of $230 a ton to the exchange price, Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd. said in a report e-mailed on June 28. Beans from Vietnam were at a premium of $140 a ton, data from the trader showed. While Indonesia is gathering its 2013-14 crop, the next harvest in Vietnam will only start in October. Beans in the physical market trade at a differential to the futures, which could be a premium or a discount.
“The robusta differentials have firmed in this off-season peak and should not be weaker up until after the end of the Ramadan, or even up to the end of August/beginning of September,” Rodrigo Costa, a trading director at Caturra Coffee Corp. said in a report e-mailed yesterday. “After this, I think the Liffe contract should suffer new selling waves.”
Cocoa for September delivery slid 0.2 percent to 1,449 pounds ($2,203) a ton in London. Cocoa for September delivery was down 0.3 percent to $2,153 a ton in New York. Futures trading volumes were 58 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
White sugar for October delivery was little changed at $480.90 a ton on NYSE Liffe. Raw sugar for delivery in October was unchanged at 16.69 cents a pound 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.