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  • News Desk
  • Dec 13th, 2018
  • Comments Off on Cocoa rises four percent on fund buying; robusta coffee sets new low
New York cocoa futures rallied 4 percent on Wednesday, boosted by speculative buying and expectations of a slowdown in supplies from top producer Ivory Coast, while sugar fell and robusta coffee dropped to a 2-1/2-month low.

March New York cocoa settled up $46, or 2.2 percent, at $2,162 per tonne, earlier reaching a session high of $2,200, a 4 percent increase. During the prior session, prices fell 4 percent.

Dealers noted corrective buying in modest volume, which helped prices to recover most of the ground they lost during a speculative sell-off on Tuesday.

The market was also supported by expectations that port arrivals in top grower Ivory Coast may start slowing after an initial surge, dealers said.

"The arrivals are tapering off," one European dealer said. "Considering we're less than three months into arrivals, they have exceeded even the highest expectations - but they can't keep up their pace."

Dealers noted appetite to take delivery was weak, mainly because of an abundance of lower-quality Cameroon cocoa in the certified stocks.

March London cocoa settled up 22 pounds, or 1.4 percent, at 1,614 pounds per tonne.

March arabica coffee settled up 0.7 cent, or 0.7 percent, at $1.0305 per lb, hovering near a 2-1/2-month low of $1.0205 touched on Tuesday.

Upside potential remained, said Frank Cholly, senior market strategist at RJO Futures. "There's so many shorts in the market. When those shorts start to cover, it could be fuel on the fire and it could really make this market run."

Total open interest rose for the eighth consecutive session to 259,043 as of Dec. 11, ICE data showed.

March robusta coffee settled down $5, or 0.3 percent, at $1,522 per tonne, earlier falling to a 2-1/2-month low of $1,522.

Prices remained under pressure from expectations of ample supplies from top grower Vietnam, which is in the midst of harvesting a large crop.

March raw sugar settled down 0.09 cent, or 0.7 percent, at 12.74 cents per lb, shrugging off an earlier rally in the Brazilian real and firmer oil prices.

While supplies are now abundant, fundamentally, the focus shifted to forecasts for forthcoming lower output from India and Thailand.

"The market is doing its job of reducing supply as prices fall," said Nick Penney, senior trader at Sucden Financial.

March white sugar settled down $1.50, or 0.4 percent, at $343.20 per tonne.

Copyright Reuters, 2018

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