ICE arabica coffee near 3-year low on commodity selloff
Michael Chen
Senior Web Developer
ICE arabica coffee futures touched an almost three-year low on Monday during a broader selloff in commodities amid mounting concern about the pace of the global economic recovery and weaker-than expected economic data from China.
Raw sugar and cocoa futures on ICE also fell.
The Thomson Reuters-Jefferies CRB Index sank, with gold posting its largest two-day loss in 30 years, as news of weaker-than-forecast economic data in China exacerbated earlier losses prompted by the central bank of Cyprus planning to sell gold.
Soft commodities felt pressure as funds accelerated their exits from the market, and investors also cut exposure to oil, copper and grain.
ICE July arabica coffee futures fell 1.05 cents, or 0.8 percent, to finish at $1.3610 per lb, after earlier sliding to $1.3355 a lb, the lowest price for the second-month contract since May 2010.
Coffee over the last several months has been traded more by specs than commercial interests, and now we have a meltdown in the outside markets, said James Cordier, principal and founder of Optionsellers.com.
Non-commercial dealers have been trimming their net short position in arabica contracts back from a record high, according to US government data, though the position remains at high levels.
Investor selling and expectations of ample Brazilian supplies have pushed ICE arabica futures to recent lows.
Trading volumes were heavy, at about 59,000 contracts compared with a 30-day average of fewer than 23,000 contracts, preliminary Thomson Reuters data showed.
July robusta coffee on Liffe closed down $11, or 0.5 percent, at $2,058 a tonne.
Source: brecorder.com/markets/commodities/europe/115368-ice-arabica-coffee-near-3-year-low-on-commodity-selloff.html
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