Cocoa futures on ICE rose on Wednesday, touching more than five-month highs in light volume as concerns over damaging weather in top grower Ivory Coast persisted, while arabica coffee also rose. White sugar, robusta coffee and cocoa did not trade in London on Wednesday as markets closed for the Boxing Day public holiday.
March New York cocoa settled up $114, or 4.9 percent, at $2,429 per tonne. The contract traded as high as $2,436, a price last reached in mid-July. Prices were supported by concerns about dry, damaging weather in Ivory Coast, dealers said. Ivorian farmers said more rain was needed to sustain the October-to-March main cocoa crop, as dry Harmattan winds descended further into the country last week.
The move higher happened on an extremely low-volume day, dealers emphasized. "I think this move is a little bit exaggerated; it's so high in such light volume. Once we see a big volumes again, we could see a big down day," one US dealer said. Cocoa arrivals to the ports in Ivory Coast reached 725,809 tonnes between Oct. 1 and Nov. 30, according to data from country's marketing board. This was higher than the 689,000 tonnes exporters had estimated for the period.
March arabica coffee settled up 1.7 cents, or 1.7 percent, at $1.039 per lb, after touching a Dec. 14 high of $1.04 per lb. Prices were buoyed by the broader positive market sentiment, one US dealer said, as both equities and crude oil traded higher. The contract dipped to a three-month low of 98.60 cents last week.
All of the action we had last week, we basically reversed today so that's a nice sign if you're trying to be bullish, as it could catch the shorts flat-footed, particularly after the holiday," said Steve Platt, futures strategist at Archer Financial Services. This was the March contract's best day in terms of a percentage increase since mid-November. Coffee prices have been dragged down in recent weeks by a record-large crop in top grower Brazil.
March raw sugar settled down 0.01 cent, or 0.08 percent, at 12.39 cents per lb, after trading in a tight range. Raw sugar prices have closed lower in three of the past five sessions. Prices had some support from the bounce in oil prices, dealers said.