ICE Arabica and Cocoa Futures Rally Amid Market Weakness

Coffee and cocoa traders faced a tricky start to November as global commodity markets weakened, led by oil price declines and concerns over Brazil’s rainy season affecting future supply. Yet despite the gloom, two key commodities staged surprising rebounds midweek thanks to technical factors and strategic buying.

On November 4, ICE March Arabica coffee futures closed up 1.2% at $1.925 per pound after hitting a one-month low of $1.864, recovering due to short-covering and a lift from key technical levels.

Why Did Coffee Futures Bounce Back?

The most-traded March Arabica contract on ICE initially dipped to $1.864, a one-month low, reflecting broader commodity weakness. But the market turned around after prices broke above both the 50-day and 200-day moving averages, triggering technical buying. Additional support came from processor buying near the daily lows. The contract eventually settled at $1.925, up 2.35 cents or 1.2%.

What Happened with Other Coffee Contracts?

Meanwhile, London’s January Robusta contract fell 1.6% to $2,040 per tonne (down $33), showing a divergence between the two major coffee types. While Arabica found technical strength, Robusta succumbed to selling pressure alongside the broader commodity sell-off.

And What About Cocoa?

Cocoa also defied the downward trend. ICE March futures rose 0.7% to $2,877 per tonne (up $21), bouncing off a five-and-a-half month low of $2,853 hit earlier in the session. The London-based LIFFE March contract added 0.5% to £1,879 per tonne (up £9), confirming solid interest despite overall market pressure.

Why Did Other Commodities Decline?

Most commodities struggled. The Thomson Reuters CoreCommodity CRB Index dropped as oil markets plunged. Among the index’s 19 components, only coffee, cocoa, and natural gas finished higher. Factors like favorable weather in Brazil and expected new supplies in Asia contributed to the downward pressure on many soft commodities.

How Did Sugar Perform?

ICE March raw sugar futures fell 1.6% to $0.1568 per pound (down 0.25 cent), while London’s December white sugar futures were down 1.4% at $416.70 per tonne (off $6). These declines aligned with the general weakness in agricultural commodities and were influenced by Brazil’s rain outlook and seasonal supply factors.

Frequently Asked Questions

Why did ICE Arabica coffee futures rise on November 4?

March Arabica coffee futures gained 1.2% to $1.925 per pound after hitting a one-month low of $1.864. The rebound was driven by technical buying once prices moved above the 50- and 200-day moving averages, along with increased processor demand near the session’s lows.

What was the price movement for Robusta coffee?

London’s January Robusta coffee futures fell 1.6% to $2,040 per tonne (a $33 drop) as the contract faced selling pressure in line with the broader commodity market decline.

How did cocoa perform despite falling markets?

ICE March cocoa futures rose 0.7% to $2,877 per tonne (up $21), recovering from a five-and-a-half month low of $2,853. LIFFE March cocoa also gained 0.5% to £1,879 per tonne (up £9), showing resilience.

Which commodities were down on November 4?

Most commodities declined, including oil and sugar. ICE raw sugar fell 1.6% to $0.1568 per pound, and London white sugar dropped 1.4% to $416.70 per tonne. Only coffee, cocoa, and natural gas closed higher among the CRB Index’s 19 components.

What triggered the technical buying in coffee?

Technical buying in Arabica coffee was sparked when March futures rose above their 50- and 200-day moving averages, prompting short-covering and additional buying interest near the lows of the day.

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