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 declined too far amid lower stockpiles and high premiums. Sugar retreated.
Robusta 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 1.4 percent to $1,810 a ton by 1:11 p.m. on NYSE Liffe in London. Prices, which gained 1.5 percent yesterday, touched $1,812 earlier today, the highest for a most-active contract since June 12. Arabica coffee for delivery in September gained 1 percent to $1.2275 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 gained 0.6 percent to 1,461 pounds ($2,217) a ton in London. Cocoa for September delivery was up 0.5 percent to $2,169 a ton in New York.
White sugar for October delivery declined by 0.1 percent to $480.70 a ton on NYSE Liffe. Raw sugar for delivery in October was down 0.1 percent to 16.67 cents a pound on ICE.