Arabica Coffee Futures Climb While Cocoa Drops

Coffee traders and analysts were closely watching global supply signals on Tuesday as key markets reacted sharply to shifting technicals and fundamentals. In New York and London trading, major soft commodities including coffee and cocoa posted notable moves, driven less by harvest data and more by positioning ahead of the U.S. Thanksgiving holiday.

On November 25, ICE March Arabica coffee futures closed up 2.4%, rising 4.55 cents to $1.9505 per pound—the biggest one-day gain in a week—as traders avoided big bets ahead of clearer signals on Brazil’s 2015/16 crop.

Why Did Arabica Coffee Futures Rise?

ICE March Arabica coffee futures (KCc2) gained 4.55 cents, or 2.4%, to settle at $1.9505 per pound. The rally occurred after the contract broke through key technical support levels, triggering late-session buying. Analysts noted that while the market is awaiting clearer data on Brazil’s upcoming harvest, current supply concerns and technical buying were enough to push prices higher. “The market held its technical support levels, and fundamentally, there’s less supply,” said Jack Scoville, Vice President at Price Futures Group.

What Happened with Other Coffee Contracts?

In contrast, January Robusta coffee futures (LRCc2) dipped slightly, falling 4 dollars, or 0.2%, to $2,095 per ton. This divergence highlights differing market sentiments between Arabica and Robusta varieties, with Arabica seeing more speculative and technical movement.

Why Did Cocoa Futures Decline?

Cocoa markets saw significant selling pressure. ICE March New York cocoa futures (CCc2) dropped 42 dollars, or 1.5%, to $2,824 per ton, while ICE March London cocoa futures (LCCc2) fell 20 pence, or 1.1%, to $1,873 per ton. Both contracts dropped due to increasingly bearish technical and fundamental factors, prompting traders to exit positions. These losses represented some of the largest single-day declines in nearly two weeks.

What About Sugar Futures?

March ICE raw sugar futures (SBc1) ended the day unchanged at $0.16 per pound, despite early trading volatility. Prices initially jumped 1.3% before reversing course during the session. Meanwhile, March ICE white sugar futures (LSUc1) declined 1.90 dollars, or 0.5%, to $415.80 per ton.

How Did Trading Volumes Look Overall?

According to Thomson Reuters preliminary data, trading volumes in soft commodities were generally below average ahead of the U.S. Thanksgiving holiday on Thursday. This reduced activity likely contributed to heightened price sensitivity and sharper moves on relatively light volume.

Frequently Asked Questions

Why did Arabica coffee futures rise on November 25?

Arabica coffee futures rose because the March contract broke through key technical support levels, leading to a wave of late buying. The price increased by 4.55 cents to $1.9505 per pound, marking a 2.4% gain—the largest one-day rise in a week. Traders were cautious ahead of more clarity on Brazil’s 2015/16 harvest, so technical factors played a bigger role than fundamentals.

Why did cocoa futures fall sharply?

Cocoa futures fell due to a mix of bearish technical indicators and weakening fundamental outlooks. ICE March New York cocoa dropped 42 dollars (1.5%) to $2,824 per ton, and London cocoa fell 20 pence (1.1%) to $1,873 per ton. These moves led investors to close positions, contributing to the sharpest declines in almost two weeks.

What was the price movement for Robusta coffee?

January Robusta coffee futures (LRCc2) fell slightly by 4 dollars (0.2%) to $2,095 per ton. This small decline contrasted with the rise in Arabica futures and highlighted differing trends between the two coffee types.

Did sugar futures show any significant changes?

Raw sugar futures (SBc1) closed flat at $0.16 per pound after initially rising 1.3% and then reversing. White sugar futures (LSUc1) fell 1.90 dollars (0.5%) to $415.80 per ton, showing modest downward movement in the sugar market.

Were trading volumes normal ahead of Thanksgiving?

No, trading volumes were below average across soft commodities due to the approaching U.S. Thanksgiving holiday on Thursday. Lighter volume made prices more sensitive to trades, contributing to sharper daily moves.

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