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Investors Turn Bullish on Robusta as Stocks Set for 2000 Low

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Aug. 27 (Bloomberg) -- Money managers turned bullish on robusta coffee traded in London for the first time since May as reserves head for a 13-year low before the first significant shipments in December from Vietnam and while rain disrupts supplies from Indonesia.

Investors held a net-long position, or wager on a higher market, of 1,191 futures and options in the week ended Aug. 20, the Commitments of Traders report published today on the NYSE Liffe exchange’s website showed. That was the first bet on a gain since May 28 and reversed a week-earlier net-short position of 670 contracts. The beans used to make instant coffee fell 3 percent in the period.

Robusta coffee inventories in warehouses monitored by NYSE Liffe will tumble 34 percent to 52,000 metric tons, the lowest since May 2000, by the end of this year, the average of 10 trader estimates compiled by Bloomberg showed. Rain in Indonesia’s largest growing regions has been as much as twice the 30-year average since April, according to MDA Weather Services in Gaithersburg, Maryland. Vietnam’s next harvest starts in October.

“Rains in Indonesia are still helping the market with some supply delays,” Edward de Wismes, an agricultural futures broker at Aurel BGC in Paris, said by e-mail today. “There’s still good demand for robusta. Supply issues are leaving the market tighter.”

Vietnam is the world’s biggest robusta grower and Indonesia is the third-largest.

Cocoa, Sugar

In cocoa, money managers boosted bets on rising prices to the highest since Sept. 18. The net-long position amounted to 54,382 futures and options as of Aug. 20, up from 49,567 contracts a week earlier. The beans used to make chocolate gained 1.3 percent in the period as dry weather threatens to cut output in West Africa, accounting for 70 percent of supply.

“The weather in West Africa has remained dry, raising risks for pod development for the upcoming main crops,” Kona Haque, an analyst at Macquarie Group Ltd. in London, said in a report e-mailed today. “By reducing the outlook for both Ivory Coast and Ghana’s new crops, we see a bigger deficit developing for the 2013-14 season.”

In white, or refined, sugar, money managers boosted bullish bets to the highest since Oct. 9, NYSE Liffe data on Bloomberg showed. The net-long position climbed to 11,218 futures and options from 9,405 contracts a week earlier. The sweetener fell 2.9 percent in the period.

In feed wheat, money managers reduced their net-short position to 493 contracts from 522 lots a week earlier. The grain declined 0.3 percent in the period.

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.

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