Cocoa futures on ICE fell on Thursday, with London cocoa dropping to its lowest levels in nearly three months, pressured by a positive supply outlook for next year's West African crop. December London cocoa settled down 9 pounds, or 0.5%, at 1,721 pounds a tonne, after falling to 1,719, its lowest since May 20.
Cocoa prices have been weighed down by expectations that the improving weather outlook in West Africa will result in a large crop in the top-growing region. December New York cocoa settled down $6, or 0.3%, at $2,198 a tonne, in the contract's 17th negative close in 18 sessions.
The contract has been in technically oversold territory on the relative strength index for the past week, which should support a potential recovery in the event of bullish news, dealers said. Ghana will not make a decision on a cocoa farmgate price until an industry committee meets to discuss it in September, a spokesman for the Ghana Cocoa Board said on Thursday.
Latin American cocoa could soon demand a minimum price of $3,200 a tonne if a proposal from Peru finds support at a gathering of regional producers on Thursday, one month after their counterparts in West Africa announced a shift in how they price beans. October raw sugar settled up 0.02 cent, or 0.2%, at 11.63 cents per lb, supported by a firmer currency in top-grower Brazil. The Brazilian real strengthened on Thursday after setting 2-1/2-month lows against the US dollar in the previous session.
A stronger real discourages producers from selling dollar-priced commodities like sugar and coffee. The market has been weighed down by weak macroeconomic conditions and short-term oversupply, though forecasts of a 2019/20 deficit are limiting losses, dealers said. October white sugar settled down $1.20, or 0.4%, at $313.50 a tonne.
The World Trade Organization set up panels on Thursday to rule on complaints by Australia, Brazil and Guatemala against India's export subsidies for sugar and sugarcane producers, which they assert are illegal, a Geneva trade official said. December arabica coffee settled up 0.1 cent, or 0.1%, at 98 cents per lb, underpinned by the firmer Brazilian real.
Dealers were watching $1.00 as resistance. The contract has not closed above that psychologically significant level in nearly a week. The market has been capped by plentiful supplies after a large harvest in Brazil, though current low prices could curb production elsewhere. November robusta coffee settled up $16, or 1.2%, at $1,354 a tonne.