BLBG: Coffee, Sugar, Wheat Decline as Investors Reduce Bets After Gains in 2010
Coffee fell for a second day in New York and sugar, corn and wheat futures declined as investors unwound positions in agricultural commodities after prices jumped last year.
Investors may be eliminating long positions, or bets that prices will rise, after coffee in New York jumped 77 percent last year and robusta futures on Dec. 30 touched the highest level since Sept. 26, 2008. Sugar declined for a second day after gaining 19 percent last year and corn and wheat dropped after reaching two-year highs in 2010.
“Since the commodities markets boomed in 2010 they’re high pretty much across the board,” said Jonathan Bouchet, an analyst at OTCex Group in Geneva. “That could continue, but right now it’s correcting because many investors are switching back to equities. There’s a lot of capital-flow switching back to the equity markets.”
Arabica-coffee for March delivery dropped 3.55 cents, or 1.5 percent, to $2.3140 a pound on ICE Futures U.S. in New York at 12:47 p.m. London time. Robusta-coffee for March delivery lost $98, or 4.7 percent, to $1,974 a metric ton on the NYSE Liffe exchange in London. A close at that price would represent the biggest drop since Oct. 4.
Raw sugar for March delivery fell 0.19 cent, or 0.6 percent, to 30.81 cents a pound in New York. In London, refined- sugar futures for March delivery slumped $4.80, or 0.6 percent, to $756 a ton.
Cocoa Falls
Cocoa futures for March delivery declined $54, or 1.8 percent, to $2,878 a ton in New York. Cocoa futures for March delivery fell 28 pounds, or 1.4 percent, to 1,934 pounds ($3,015) a ton in London. Cotton was little changed at $1.4376 a pound.
Corn futures for March delivery fell 7.25 cents, or 1.2 percent, to $6.0125 a bushel on the Chicago Board of Trade. Prices surged 52 percent last year. Soybeans for March delivery fell 4 cents, or 0.3 percent, to $13.655 a bushel in Chicago.
Wheat for March delivery fell 11 cents, or 1.4 percent, to $7.7825 a bushel in Chicago. The most-active contract advanced 47 percent last year and on Aug. 6 touched a two-year high as the worst drought in a half-century devastated crops in Russia.
Milling wheat for March delivery traded on NYSE Liffe in Paris fell 1.2 percent, the second straight decline, to 250.50 euros ($331.11) a ton.
Some traders will buy and sell in a range, buying if futures fall to a set level and selling if the contracts rise to a certain price. That creates volatility in the market and may be scaring out some long-term investors who don’t thrive when the market price fluctuates, Bouchet said.
“There are many range traders out there, and price fluctuations are good for these guys because volatility is very strong,” Bouchet said. “It’s quite risky for the long-term traders. Those guys are cashing in on commodities and moving to more stable products such as equities at the moment.”
To contact the reporters on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
Coffee fell for a second day in New York and sugar, corn and wheat futures declined as investors unwound positions in agricultural commodities after prices jumped last year.
Investors may be eliminating long positions, or bets that prices will rise, after coffee in New York jumped 77 percent last year and robusta futures on Dec. 30 touched the highest level since Sept. 26, 2008. Sugar declined for a second day after gaining 19 percent last year and corn and wheat dropped after reaching two-year highs in 2010.
“Since the commodities markets boomed in 2010 they’re high pretty much across the board,” said Jonathan Bouchet, an analyst at OTCex Group in Geneva. “That could continue, but right now it’s correcting because many investors are switching back to equities. There’s a lot of capital-flow switching back to the equity markets.”
Arabica-coffee for March delivery dropped 3.55 cents, or 1.5 percent, to $2.3140 a pound on ICE Futures U.S. in New York at 12:47 p.m. London time. Robusta-coffee for March delivery lost $98, or 4.7 percent, to $1,974 a metric ton on the NYSE Liffe exchange in London. A close at that price would represent the biggest drop since Oct. 4.
Raw sugar for March delivery fell 0.19 cent, or 0.6 percent, to 30.81 cents a pound in New York. In London, refined- sugar futures for March delivery slumped $4.80, or 0.6 percent, to $756 a ton.
Cocoa Falls
Cocoa futures for March delivery declined $54, or 1.8 percent, to $2,878 a ton in New York. Cocoa futures for March delivery fell 28 pounds, or 1.4 percent, to 1,934 pounds ($3,015) a ton in London. Cotton was little changed at $1.4376 a pound.
Corn futures for March delivery fell 7.25 cents, or 1.2 percent, to $6.0125 a bushel on the Chicago Board of Trade. Prices surged 52 percent last year. Soybeans for March delivery fell 4 cents, or 0.3 percent, to $13.655 a bushel in Chicago.
Wheat for March delivery fell 11 cents, or 1.4 percent, to $7.7825 a bushel in Chicago. The most-active contract advanced 47 percent last year and on Aug. 6 touched a two-year high as the worst drought in a half-century devastated crops in Russia.
Milling wheat for March delivery traded on NYSE Liffe in Paris fell 1.2 percent, the second straight decline, to 250.50 euros ($331.11) a ton.
Some traders will buy and sell in a range, buying if futures fall to a set level and selling if the contracts rise to a certain price. That creates volatility in the market and may be scaring out some long-term investors who don’t thrive when the market price fluctuates, Bouchet said.
“There are many range traders out there, and price fluctuations are good for these guys because volatility is very strong,” Bouchet said. “It’s quite risky for the long-term traders. Those guys are cashing in on commodities and moving to more stable products such as equities at the moment.”
To contact the reporters on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
