ICE raw sugar futures rose on Monday, bolstered by investor short-covering and chart-based buying, while arabica coffee turned lower in choppy dealings. ICE cocoa futures were little changed in light trade, taking a breather after three volatile sessions that lifted them to the highest in nearly three years on expectations of strong demand.
The ICE July raw sugar contract rose 0.06 cent, or 0.4 percent, to settle at 17.10 cents a lb, having earlier touched a 12-day high of 17.22 cents a lb. July options expired at the end of the session. Total open interest increased by more than 13,600 lots to a nine-month high of 893,629 lots on June 13, ICE data showed, when the spot contract sent technical buy signals and rallied in an outside reversal.
Dealers said sugar prices rose on short-covering after the US Commitments of Traders (COT) report showed speculators had reduced their bullish position by nearly one-third to a three-month low in the week ended June 10, US Commodity Futures Trading Commission data showed post-market Friday. "The COT report was viewed as bullish as the funds have put on a decent sized short over the reporting period (they remain net long as a bloc) which makes those particular positions look the most vulnerable," said Thomas Kujawa, co-head of the softs desk at Sucden Financial Sugar.
Traders said there were reports of harvest slowing in some parts of top grower Brazil as mills waited for crops to mature, also buoying the market. Liffe August white sugar rose $1.60, or 0.3 percent, to close at $466.80 a tonne. Arabica coffee turned lower as buying interest petered out after the market failed to reach the 100-day moving average at $1.8085, basis September.
September arabica futures on ICE settled down 0.65 cent, or 0.4 percent, at $1.7580 a lb. Total open interest fell 7,665 lots to 166,113 lots on Friday, the first drop in seven sessions, exchange data showed. "Arabica is seeing some fresh buying this morning after Friday's sloppy trade," said Sterling Smith, a futures specialist with Citi, in a morning report when the market was firm.
"The market will need to show more consistency to the upside in order to keep the fund interest and the cash flowing into the long side of the market." Liffe's London-based robusta coffee for September firmed by just $1, or 0.05 percent, to end at $1,999 a tonne, just above the 100-day moving average for the second straight session at $1,998. In cocoa, ICE's September contract settled up $3, or 0.1 percent, at $3,106 a tonne, after hitting a near three-year high of $3,125 on Friday. Liffe September cocoa ended down 3 pounds, or 0.2 percent, at 1,936 pounds a tonne.
