Robusta coffee declined to the lowest level in more than seven weeks in London as technical signals triggered selling at a time when roasters aren’t buying. Sugar gained.
The beans used to make instant coffee and espresso broke the $1,800 a metric ton support level yesterday and prices may be headed for the $1,750 a ton area, Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. While stockpiles monitored by NYSE Liffe fell 6 percent in the past two weeks after declining 15 percent in the previous period, futures for September delivery switched to being at a discount to the November contract yesterday from a premium on Aug. 20. That indicates easing supply concerns.
“The technical picture has deteriorated for robusta and the next target seems to be $1,721 a ton,” Alex Parry, a broker at ABN Amro Markets U.K. Ltd. in London, said by e-mail today. “System funds are selling and roasters aren’t aggressive buyers at the moment. Spreads have also weakened after the shock of the previous certified stocks draws.”
Robusta coffee for delivery in November was 1 percent lower at $1,776 a ton, the lowest since July 1, by 11:02 a.m. on NYSE Liffe in London. Arabica coffee for December delivery retreated 0.3 percent to $1.1675 a pound on ICE Futures U.S. in New York.
Money managers increased their net-short position, or bets on lower prices, in robusta coffee to 670 futures and options in the week ended Aug. 13, exchange data showed. That was up from a net-short position of 276 contracts a week earlier. Robusta coffee stockpiles with a valid grading certificate in warehouses monitored by NYSE Liffe were 78,750 tons on Aug. 19, down from 83,770 tons two weeks earlier, according to the bourse’s data.
White sugar for October delivery gained 0.1 percent to $482.70 a ton on NYSE Liffe. Raw sugar for delivery in October rose 0.5 percent to 16.36 cents a pound on ICE.
Cocoa for December delivery advanced 0.3 percent to 1,633 pounds ($2,550) a ton in London. Cocoa for December delivery gained 0.5 percent to $2,466 a ton in New York.
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