Coffee Futures Slip Ahead of Vietnam Harvest; Wheat Slips

Neena Rai

  LONDON  -  Robusta coffee futures fell in early European trading Thursday as

expectations of a bumper crop out of top grower Vietnam weigh on the market.

  At 0958 GMT, November robusta coffee futures traded 1.1% lower at $1,690 a

metric ton. Dealers also noted that weakness in New York's arabica market

continued to add subdued undertones to London's coffee prices.

  "London coffee prices have been consolidating around the $1,690-$1,700 level,

struggling for some direction. A lack of momentum suggests London coffee may

continue trading sideways, with immediate support at the $1,660 area," Sucden

Financial brokerage in London said.

  Meanwhile, European Union wheat futures for November delivery slipped 0.3% to

EUR190 a ton. Market participants believe next Monday's U.S. Department of

Agriculture stocks report shall give further pricing direction to wheat

futures.

  "We have been banging the wheat bull drum for the last couple of months; we

believe this stocks report will be one of the triggers for the divergence of

this market away from the bearish corn fundamentals. We believe this report

will show a far stronger level of wheat feeding than many expect," Macquarie

bank said.

  December cocoa futures traded flat at GBP1,675 a ton, as the market

consolidated from the losses of the prior session. Dealers said fresh news is

needed for pricing direction.

  "We have progressively changed our views feeling that the level of industry

cover is critically low (particularly for the smaller participants) and the

specs are still very long," Eric Sivry, head of agri options brokerage in

London said.

  "With month-end approaching, there is a growing sentiment that either one or

the other of these players may soon pay up. The industry may want to replenish

ahead of the official start of the new cocoa season," Mr. Sivry added.

  Meanwhile, London sugar futures for December delivery edged 0.5% lower to

$488.50 a ton.