December New York cocoa settled up $56, or 2.6 percent, at $2,170 a tonne, after touching its lowest level since mid-February at $2,100. December London cocoa settled up 38 pounds, or 2.4 percent, at 1,625 pounds a tonne, after hitting the lowest level since March 1 at 1,577 pounds. Speculators reduced their bullish stance in cocoa to the smallest level since early February, when they were net short, data showed.
That data, combined with prices falling to oversold levels on the 14-day relative strength index, spurred buying, said Peter Mooses, senior market strategist for RJO Futures in Chicago.
The September discount to December narrowed sharply to close at $48, compared with $68 in the prior session, due to heavy position rolling ahead of the spot contract's first notice day on Aug. 23, Mooses said. October raw sugar settled up 0.13 cent, or 1.2 percent, at 10.98 cents per lb, after hitting a session high of 11.13 cents.
Follow-through buying lifted prices after Friday's 2.5 percent rally, which briefly took prices above the key 11 cent resistance level, dealers said. The market was also supported by data on Friday that showed speculators had sharply increased their bearish position, which attracted short-covering on Monday, traders said.
Prices were further supported by dry conditions in the European Union and center-south region of Brazil, though the world's biggest grower did get some relief in the form of widespread rains over the weekend, dealers said. October white sugar settled up $3, or 0.9 percent, at $327.30 a tonne. September arabica coffee rose 1 cent, or 0.9 percent, to $1.0875 per lb.
Prices were lifted by short-covering that took place across many commodity markets, though they remained below the cost of production for many producing countries, said Rodrigo Costa, director of trading for Comexim USA. Total open interest in arabica futures rose to a new record high of 340,320 contracts on Friday, according to ICE data. September robusta coffee settled up $20, or 1.2 percent, at $1,682 a tonne.