"The New York March price is swinging through a thicket of momentum indicators that tend to ignite trading," said analyst Tobin Gorey of Commonwealth Bank of Australia, adding that fundamentals were not currently driving the market. Some believe technically-driven funds have been the main buyers in recent days, but there has been little clarity as dealers wait for Commitments of Traders (COT) reports to resume. They had been delayed this month due to the US government's partial shutdown.
"Belief in the wider market is that the funds have been buying, which is the main driver for the recent bull moves," said Darren Stetzel, commodity broker at INTL FCStone in Singapore. "But the truth is that no one can be sure what the fund position is until the next (COT) report is published, which will continue to add some volatility to the market amid differing opinions," he added.
March white sugar fell $4.40, or 1.2 percent, to $341.50 a tonne. March arabica coffee was up 0.5 cents, or 0.5 percent, at $1.0315 per lb, consolidating after the previous session's steep fall. Dealers continued to keep a close watch on the weather in top grower Brazil, with the sharp fall on Monday linked to rains that diminished concern about dry weather.
Some, however, suggested that the threat to crops remained, with the rains seen as insufficient. March robusta coffee was up $23, or 1.5 percent, at $1,531 a tonne. May New York cocoa fell $19, or 0.8 percent, to $2,265 a tonne. Dealers said supplies remained ample and port arrivals in top grower Ivory Coast are still running ahead of last season's pace and crop conditions for the mid-crop are largely favourable. May London cocoa was down 10 pounds, or 0.6 percent, at 1,613 pounds a tonne.