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  • Jun 22nd, 2018
  • Comments Off on London cocoa falls from 3-week high, sugar steadies
Cocoa futures on ICE dipped on Thursday, with the London market falling from a three-week high on pressure from forecasts for much-needed rain in top producer Ivory Coast's growing regions, while sugar and coffee were little changed. September London cocoa settled down 25 pounds, or 1.4 percent, at 1,815 pounds per tonne after peaking at a three-week high of 1,847 pounds.

Spot prices have been supported by a lack of selling from origins such as Ivory Coast and Ghana, which have hedged much of their supplies already, as well as forecasts for scattered showers in the cocoa-growing regions of those countries that could improve crop outlooks, traders said.

"This could be just an intra-day pullback given the magnitude of what we've done (on the upside)," one dealer said, adding price charts still appeared bullish after the recent advance in prices.

The second-position contract was on track for its second straight weekly rise.

Part of the market's strength has come from the July contract's surging premium over September to 17 pounds versus a discount on Monday, potentially indicating nearby demand on the physical market, traders said.

The flooding in Ivory Coast's commercial capital Abidjan was not seen as a major threat to cocoa, they added.

September New York cocoa settled down $40, or 1.6 percent, at $2,513 per tonne. It traded within the prior session's range.

October raw sugar settled up 0.02 cent, or 0.2 percent, at 12.21 cents per lb, trading within Wednesday's range.

Talk that dry weather in top grower Brazil could damage cane continued, traders said.

"We are a little skeptical that this dry period will curtail sugar production ... Certainly, if no material rain falls for an extended period then the issue takes on a different character," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.

August white sugar settled down 30 cents, or 0.1 percent, at $341.80 per tonne.

September robusta coffee settled up $6, or 0.4 percent, at $1,701 per tonne.

"Supplies are tight because farmers are not selling at this low price," a Ho Chi Minh City-based trader said, noting that farmers are still holding around 10 percent of the output of the 2017-18 crop year.

September arabica coffee settled down 0.4 cent, or 0.3 percent, at $1.1625 per lb.

Copyright Reuters, 2018


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