SOFTS-Arabica falls for 13th straight day to a 4-1/2 year low

Marcy Nicholson and Freya Berry
Thursday, 31 Oct 2013 | 12:40 PM ET

* ICE arabica on track to finish October down nearly 7 pct

* U.S. COT data shows record long position in raw sugar

* Cocoa rises as investors seize on low prices

(New throughout, updates prices; adds trade comment, byline, NEW YORK dateline)

NEW YORK/LONDON, Oct 31 (Reuters) - Arabica coffee on ICE touched a four-and-a-half year low on Thursday, falling for the 13th straight day on a wave of automatic sell orders as a lack of any new fundamentals kept the over-supplied market's bearish tone intact.

Raw sugar trading on ICE Futures U.S. initially extended losses and reached a one-month low after closing below the 200-day moving average on Wednesday, but then turned higher after finding support. Cocoa futures on both ICE and Liffe were firm but trading within the range of recent sessions.

Arabica futures were on track to end the month down nearly 7 percent, the spot contract's weakest monthly performance since November 2012 as the market maintained its long-term trend lower on abundant global supplies. The contract has dropped around 26 percent in 2013 so far, making it the second weakest performer, next to Chicago Board of Trade corn, on the Thomson Reuters/CoreCommodity CRB index, a global benchmark for commodities.

December arabica coffee futures on ICE were down 0.85 cent, or 0.8 percent, at $1.06 per lb by 12:17 p.m. EDT (1617 GMT), having earlier touched $1.0575, the lowest level for the front-month since March 2009. The spot contract has so far dropped 6.8 percent in October, its biggest monthly tumble in 11 months.

Position rolling out of December into March ahead of the spot contract's first notice day Nov. 20, boosted volume total volume above 26,500 lots, up 20 percent from the 250-day average for the full session, preliminary Thomson Reuters data showed.

Favorable weather for the vital flowering phase of top grower Brazil's coffee trees has supported expectations for a third successive large crop. This, combined with the expectation for a record robusta crop from Vietnam's current harvest and an improved yield in top washed-arabica grower Colombia, is keeping world bean prices under pressure.

"We're generally pretty bearish on coffee, given you've got booming supply from Brazil and South America generally," Tom Pugh of Capital Economics said.

There was little relief for the bulls as analysts saw room for more declines in price.

"Any further downside movement could build on the recent bear run, which could see prices targeting the short-term level of 100 (cents)," Kash Kamal, an analyst at Sucden Financial, said.

Liffe January robusta coffee was down $23, or 1.5 percent, at the session low $1,486 a tonne, just above Tuesday's more than three-year low of $1,462, on track to close October down 9.3 percent, its weakest monthly performance in a year.


ICE raw sugar futures dealt in light volume, turning higher for the first time this week after initially tapping a one-month low where mild support was found. The market remained below the 200-day moving average at 18.41 cents per lb, after the March contract closed below this level on Tuesday for the first time in nearly four weeks.

A delayed U.S. Commitment of Traders report released post-market on Wednesday showed that speculators raised their net long positions in ICE sugar and cocoa contracts to the highest since records began seven years ago in the week ended Oct. 15.

The record long speculative position made the market vulnerable to further losses, along with weak demand and abundant global supplies.

March raw sugar futures on ICE ticked up 0.03 cent, or 0.2 percent, to 18.35 cents per lb, having earlier dipped to a four-week low of 18.26 cents a lb as speculators grew nervous at the size of bullish bets.

The spot contract is on track to closed October up 5 percent, its second straight firm monthly performance.

December white sugar on Liffe was down $1.80, or 0.4 percent, at $483.30 a tonne.

Cocoa futures climbed on industry buying after falling roughly 5 percent from two-year highs reached earlier this month.

In cocoa, ICE December futures rose $12, or 0.5 percent, to $2,672 a tonne. The contract rose a slight 1.3 percent this month so far, on track for its fourth straight monthly gain. Year-to-date, it has risen nearly 20 percent, making it the strongest performer on the CRB index.

London March cocoa was up 11 pounds, or 0.7 percent, at 1,701 pounds per tonne. The second position has risen 1 percent in October so far, also on track for its fourth straight positive monthly performance.

(Additional reporting by Sarah McFarlane in London; Editing by Jane Baird and Marguerita Choy)

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