coffe options

coffee futures rise

May 2nd, 2013

Coffee futures robusta rebounded in London on speculation exchange data due later today will show stockpiles declined as beans from producing countries are trading at a premium. Sugar fell and cocoa swung between gains and losses.

Robusta inventories with a valid grading certificate in warehouses monitored by NYSE Liffe were 126,250 metric tons on April 15. The exchange data is due today and may show that inventories dropped in the two weeks to April 29. Coffee from Vietnam, the world’s top producer of the robusta variety, and third-ranking Indonesia was trading at a premium of $90 a ton to NYSE Liffe last week, according to Volcafe, the Winterthur, Switzerland-based unit of ED&F Man Holdings Ltd.

“There’s speculation that certified stocks have been sold to the industry,” Jerome Jourquin, head of agricultural commodity derivatives at Aurel BGC in Paris, said by e-mail today, referring to coffee roasters.

Robusta futures for delivery in July were up 0.7 percent at $2,012 a ton by 10:50 a.m. on NYSE Liffe in London. The price fell 0.4 percent yesterday. Arabica futures for July delivery gained 0.9 percent to $1.3585 a pound on ICE Futures U.S. in New York after sliding 0.3 percent yesterday. Futures trading volumes were 54 percent lower than the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

Robusta fell 2.1 percent last month as rainfall returned to growing areas in Vietnam, easing concerns a drought would cut next year’s output. Coffee growing regions in the Dak Lak province, which represents about 30 percent of the country’s crop, will get rains in the first 10 days of May, the Meteorology and Hydrology Department said in a report yesterday.

Coffee futures : Dip Buying

“We continue to like robusta from the long side when bought on dips,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “Inclinations for upside action have become tempered due to the change of weather and the weak arabica market.”

Cocoa swung between gains and losses after rallying as much as 2 percent in London yesterday as traders weighed buying by speculators and potential sales from producing nations in West Africa. Ivory Coast and Ghana may resume their selling program today after yesterday’s holiday and “every push higher may be met by a greater level of resistance,” said Eric Sivry, head of agriculture options brokerage at Marex Spectron in London.

“System speculators went cocoa-loco, buying everything they could lay their hands on,” Sivry said in a report e-mailed today. “At this point in time, the likelihood is that they are mainly going long rather than still covering shorts. Cocoa is moving more because of technical issues.”

Cocoa for July delivery was unchanged at 1,566 pounds ($2,437) a ton in London. It rose as much as 0.5 percent to 1,574 pounds a ton, the highest for a most-active contract since Dec. 4, and also fell as much as 0.3 percent. Cocoa for July delivery was little changed at $2,412 a ton in New York.

White sugar for delivery in August fell 0.2 percent to $499 a ton on NYSE Liffe. Raw sugar for delivery in July was little changed at 17.32 cents a pound on ICE.

- Isis Almeida in London at Bloomberg.