Raw sugar was flat as US budget talks weighed on some markets. March arabica coffee futures on ICE sank 5.80 cents, or 3.7 percent, to settle at $1.5060 per lb, after earlier falling 4.3 percent to a session low at $1.4960. This marks their second straight monthly loss, having dropped more than 15 percent in the past two months, the weakest two-month performance for second position contract since October 2011.
On Wednesday, the benchmark contract fell to a 2-1/2-year low, then reversed course and jumped on heavy short-covering. On Friday, origin selling from top grower Brazil helped give the market an early negative tone as producers there were attracted to the strength of the US dollar against the Brazilian currency, the real, dealers said. Investment funds have also been using the two-day price hike to square their books after taking a large short position.
So far this year, arabica futures are the weakest performer on the Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, having dropped more than 37 percent since the end of 2011. January robusta coffee futures closed down $24, or 1.2 percent, at $1,914 a tonne. Dealers said origin selling in Vietnam, where the robusta harvest is in full swing, limited upside potential in the market. Certified coffee stocks held in NYSE Liffe nominated warehouses fell marginally to 108,490 tonnes as of November 26, from 108,580 tonnes on November 12, exchange data showed.
Cocoa prices turned marginally higher, recovering from earlier pressure in what appeared to a be a brief reaction to the International Cocoa Organization's (ICCO) estimate for a 2011/12 global cocoa supply surplus. The ICCO estimated a surplus of 90,000 tonnes, reversing a previous forecast for a deficit of 19,000 tonnes. Benchmark ICE March cocoa futures settled up $7, or 0.3 percent, at $2,498 a tonne. On the month, they finished up 4 percent. Liffe March cocoa futures finished up 1 pound at 1,586 pounds per tonne. March sugar futures on ICE settled unchanged at 19.34 cents a lb. March white sugar on Liffe rose $2.80, or 0.5 percent, to close at $516.10 per tonne.