ARABICA AND ROBUSTA MARKET NEWS

    * Cocoa up on political, financial turmoil in Ivory Coast  

   * Coffee roasters forced to buy despite high prices

    * Sugar charts beginning to concern the bulls

    * NY ag commodities to shut Monday for U.S. holiday

   

    NEW YORK/LONDON, Feb 18 (Reuters) - U.S. cocoa futures  marched up to their highest level in 14 months on Friday on prospects of bank nationalization in top grower Ivory Coast,

while arabica coffee scampered to a near-14-year peak on tight  supplies.

    Sugar settled mostly lower, with top grower Brazil set to harvest next month and possibly begin to crush earlier than previously expected, easing demand slightly.      New York commodity markets will be closed on Monday in  observance of the U.S. Presidents Day holiday. [ID:nN17127360]

    Ivorian incumbent Laurent Gbagbo's government said the  state would take control of all banks that had suspended  operations in the West African state during the week, a move  that turned the nation's post-election crisis into financial  meltdown.

    "The battle for power between president (Alassane)  Ouattara, recognized internationally as the election winner,  and former president Gbagbo is escalating," Commerzbank said in a note.

    "Until the situation eases, cocoa prices should rise  further, and it will only be a matter a time before the 30-year  high (on ICE) from December 2009 is exceeded."

    ICE benchmark May cocoa futures <CCc2> rose $61, or 1.8  percent, to settle at $3,499 per tonne, the highest close for  the second-position contract since December 2009. The session  high reached $3,511, although total volume was thin at just  over 13,000 lots, 40 percent below the 30-day average.

    Liffe May cocoa <LCCK1> closed up 31 pounds at 2,263 pounds  a tonne, after earlier skipping to 2,279 pounds a tonne, its highest level since mid-July.

    "Volumes are poor in both markets because people are too  scared to do anything," a broker in London said.

    Cocoa prices on ICE have rallied more than 20 percent since  international sanctions and a month-long cocoa export ban have  tried to squeeze Gbagbo of funds and force him to stand down

after a Nov. 28 election the United Nations said he lost.

    "People are starting to worry about the quality, what's  trapped there. It's probably a pretty justifiable concern,"  said Jack Scoville, an analyst with the Price Futures Group in  Chicago.      If Gbagbo remains in power and the cocoa export ban is extended past Feb. 23, hitting the mid-crop, more beans will be  stranded in the country and start to rot at warehouses,  analysts said, hurting the projected supply surplus.

   

    COFFEE ROASTERS BUY  

    Arabica coffee prices continued to extend their gains as  tight global supplies have forced roasters to buy, despite the  high prices, and robusta coffee hit a 2-1/2-year peak, dealers  said.

    "There's good buying coming in terms of what roasters are doing, and there's some hedging getting lifted," a London-based  trader said. "And, with robusta so much cheaper (than  arabicas), people want to extend their cover there."

    ICE May arabicas <KCc2> climbed 4.15 cents, or 1.5 percent,  to settle at $2.73 per lb, the highest for the second position  since May 1997. The contract closed the week up 7.1 percent,

the biggest weekly gain in nine weeks.

    Arabica coffee open interest rose for the first time since  last week on Thursday, after falling 16 percent in the past  five sessions to a 11-month low. [ID:nN18292184]

    Liffe May robusta coffee <LRCK1> finished up $32 at $2,337 per tonne, after rising to $2,358 a tonne, the highest since  July 2008. Robusta prices have risen as some roasters  substitute the cheaper bean

brackets: into their blends   

 source:  (marcy.nicholson@thomsonreuters.com; +1 646 223 6043; Reuters  Messaging:  marcy.nicholson.reuters.com@reuters.net))

INTERVIEW-Brazil holding its coffee for even higher price

    BRASILIA, Feb 18 (Reuters) - Brazil, the world's biggest coffeeproducer, is holding out for even higher prices before releasing stocks the government amassed a year ago, the country's top coffee official told Reuters in comments that could lend fresh support to the biggest rally in14 years.

    Despite tightening supplies which have caused global coffee prices todouble since last summer, Roberio Silva expects prices to remain at theircurrent level with few prospects for a rapid rise in global output.

    "When the market warrants it, obviously we will consider (selling), but not at the moment," said Silva, Brazil's candidate for the next executivedirector of the International Coffee Organization (ICO) that will be chosenthis year.

    Brazil has an estimated 1.2 million bags of exportable 2009 arabica in storage, supplies originally purchased in early 2010 at around 300 reais($180) per bag to prop up prices when coffee futures were trading at half what they are today.

    These coffees now fetch upwards of 500 reais in Brazil, showing an implied paper gain of nearly US$240 million.    While that's equivalent to just about 3 percent of what Brazil shipped last year, the immediate injection of those supplies would go some way to easing tight supplies that could run short in 2011/12 with one analyst  forecasting a deficit.

    New York May arabica coffee futures <KCc2> continued to climb on Friday after ending at a 13-3/4 year high on Thursday. Contracts were up 2.3 percent at $2.75 per lb by 1640 GMT.

    CoffeeNetwork, a coffee information company, last week estimated global output in the 2011/12 international crop year at around 131 million 60-kg bags. That would fall short of expected demand for 135 million bags.

    More than a dozen traders, analysts and producers interviewed by Reuters in January predicted, on average, a tight but close-to-even supply and demand balance.   

         Silva also dismissed the idea of providing government incentives for growers to increase output, that he said could foment a whiplash collapse in prices and backfire on growers -- a policy that may threaten to

constrain further growth.

    "We won't entice anyone to take decisions that could require a bail out later," Silva said. He said it was down to the individual farmer to decide whether and by how much to expand his production.

    Analysts say global coffee production is failing to keep pace with rising consumption. The world's No. 2 arabica producer, Colombia, has had a run of disappointing harvests and Brazil is heading into a smaller 'off-year' crop in 2011.

    Brazil's crop supply agency Conab estimated in January the forthcoming 2011 harvest at 41.9 million to 44.7 million 60-kg bags, down from last year's 48.1 million bags. Riberio said he had received good feedback on the crop's development since then.

source:  (Reporting by Peter Murphy; Editing by Raymond Colitt ) ((peter.murphy@thomsonreuters.com; tel +55 61 3426 7025; ReutersMessaging: peter.murphy.reuters.com@reuters.net))

Keywords: COFFEE BRAZIL/ 

NY cocoa ends at 14-mth peak, coffee at 13-3/4-yr top

 NEW YORK, Feb 18 (Reuters) - U.S. cocoa futures jumped tofinish at the highest level in 14 months on Friday, onincreasing concern in top grower Ivory Coast where the incumbent leader announced some banks will be nationalized.

    Arabica coffee extended gains to close at a 14-month top on tight global supplies, while raw sugar futures closed lower.     The markets will be closed for President's Day on Monday.

   

2:00 PM        SETTLE     NET       PCT      LOW     HIGH     VOL

Sugar MAR     31.02    -0.24    -0.8%     30.80   31.49     29,106

Sugar MAY     28.42    -0.44     -1.5%    28.08   28.94      46,794

Cocoa MAR      3546     64        1.8%     3,468   3,540        36

Cocoa MAY      3499     61        1.8%     3,422   3,511         8,441

Coffee MAR   271.65    4.3     1.6%    266.45  274.00     545

Coffee MAY      273     4.15     1.5%    267.50  275.90     9,202

   

    COFFEE

    * May arabica coffee futures <KCc2> climbed 4.15 cents or 1.5 percent to settle at $2.73 per lb, the highest for the second position since May 1997. 

    * Second position closed the week up 7.1 percent, the biggest weekly gain in nine weeks.

    * Arabica coffee open interest rose for the first time

after a five-day slide, falling 16 percent, while prices soared to the highest levels in nearly 14 years - ICE data.

    * Tight supplies continued to lift the market as there was no relief expected in the near term - traders.

    * Brazil is holding out for even higher prices before releasing stocks the government amassed a year ago - top coffee

official Roberio Silva. [ID:nN18220210]

   

    COCOA

    * Benchmark May cocoa futures <CCc2> rose $61 or 1.8 percent to settle at $3,499 per tonne, the highest close for the second position since December 2009. The session high reached $3,511.

    * Second position May finished the weak up 3.8 percent, 

    * Ivory Coast will re-open branches of two major French banks on Monday after announcing it was nationalizing them to avert economic meltdown - government of disputed leader Laurent Gbagbo. [ID:nLDE71H1NQ]

    * "People are starting to worry about the quality, what's trapped there. It's probably a pretty justifiable concern." -Jack Scoville, an analyst with the Price Futures Group in Chicago.

    * Investor and commercial buying lifted prices - traders.

    * Certified cocoa stocks at ICE jumped sharply to 3,510,715bags by Feb. 18, up 124,339 bags from the previous day - ICE

data.

 Source: Reuters   

Ivory Coast Cocoa Ban Stays If Gbagbo Remains, Ouattara Tells FT

Alassane Ouattara, the internationally recognized winner of Ivory Coast’s Nov. 28 presidential election, has pledged to extend a one-month ban on cocoa exports should incumbent President Laurent Gbagbo have not left power by the time the restriction ends on Feb. 23, the Financial Times reported, citing an interview.

“If Mr Gbagbo leaves, of course the ban will be removed,” Ouattara said, according to the FT. “If he stays on, I just think the ban will continue,” the newspaper reported Ouattara as saying.

source: http://www.blogger.com/post-create.g?blogID=5905603925638069516&pli=1

Coffee Robusta Market Moves

Robusta coffee prices have gained 6.95% on the week to trade at $2,170 per metric ton, making it one of the best performing commodities.

Prices have been rising on concerns that poor weather conditions in Vietnam and Indonesia will affect crop production this year. Vietnam is the world’s largest exporter of Robusta beans, followed by Indonesia. Dry weather in Vietnam during the growing season is expected to lead to smaller beans. This was followed by late rains that delayed harvesting by a month, which is expected to result in lower quality beans. Poor conditions in Indonesia may continue, with Indonesia’s weather bureau predicting rain until June. The International Coffee Organisation (ICO) expects the adverse weather conditions to reduce production slightly in Vietnam but significantly impact Indonesia. Total production for Robusta beans may rise by just under one million bags, or around 2%, to 50.5 million bags. This compares to a 15% increase for Arabica beans. Production of Arabica beans, which are more expensive and considered to be of higher quality than Robusta beans, are dominated by Brazil and Columbia. Robusta beans are generally used for roasted ground coffee and may be mixed with Arabica to make a cheaper blend. Farmers may prefer growing Robusta beans despite the lower price as the crops produce a yield in around two to three years, whereas Arabica plants may take four to five years before producing a yield. Robusta can also be planted in more locations than Arabica as they are more resistant to tropical heat and disease and can be grown at lower altitudes. Robusta beans account for a third of the world’s coffee production. The impact of the weather conditions on this year’s crop yield may see the price of Robusta supported in the near term. The ICO believes that ‘tight supply situation, buoyant consumption and low stock levels are factors likely to continue to support prices
 

source:

http://www.marketmoves.com/category/Commodities-News/Coffee-Robusta-Market-Moves-201101170004/