Cocoa futures may consolidate or fall slightly after last weeks rally to a 7-1/2 month peak, while the outlook for robusta coffee remains muddled.
In white sugar futures, traders are at a loss to see what the market can do to find a way out of a stalemate that has kept nearby prices locked in a band between $305 and $311 per tonne.
Cocoas rally last week to its highest since last August was seen as technically driven after the New York market staged a sharp rally. For now the rally looks stalled at 1,050 sterling a tonne basis May.
The market showed little reaction to UK and Dutch first quarter 1997 grind data released on Friday. Traders said better-than-expected Dutch data probably helped counterbalance the fall in the UK.
This week the market is hanging on the response of speculators and funds to New Yorks first notice day, said one trader.
Until that pressure is alleviated the market is not likely to rally or sell off, he said.
He said speculative activity would keep prices depressed for at least a couple of days, but the market should resume its rally after that.Some traders said they expected July to target 1,100 to 1,150 sterling within the next 10 days, noting strong technicals and strengthening fundamentals. (Reuter)
Origins were well sold for the main crop, which should leave room for prices to float higher, they said.
German grind data were awaited this week.
In coffee, traders said prospects remained unclear with the recent wild swings making it difficult to predict the next direction.
Londons May delivery fluctuated from a peak of just over $1,800 per tonne in early March to a low of $1,515 later in the month.
Technically the market remained neutral, but traders said last weeks late fund-led sell-off to a low of $1,530 might bring further falls.
A break below $1,500 might take values to the next key support at $1,460 and reverse the bullish trend.
The market will also keep a close eye on Brazilian weather reports ahead of the frost season and the April 15 US green coffee stock data.
On Friday, New York arabica futures were buoyed by talk of cooler weather moving towards Brazils coffee belt, but forecasters ruled out frost.
The talk came a day after the market took a sharp dive following talk, later dismissed, of a massive build in US coffee stocks in March. (Reuter)
In white sugar, traders said the market was suffering from a lack of news.
One or two people have been trying to get bullish about the technicals, said one. But I think theyre just grasping at straws.
May had now moved above $310.00, a level expected to hold as traders started to prepare for the expiry on April 15.
The New York market had also been rangebound of late as nearby May continued to meet producer selling above 11.00 cents, while active support not far below that level kept it in a tight range.
