Thursday, 12 November 2015 01:08
LONDON: Cocoa futures in London consolidated on Wednesday just below the prior session’s four-month high as the market waited to see the extent to which recent rains in Ivory Coast had improved the outlook for crops in the world’s top grower.
Raw sugar futures extended their steep gains, boosted partly by a diminished outlook for Brazilian production, while coffee futures were little changed.
Dealers said the cocoa market’s run-up had been fuelled by concerns that dry weather in August and September could have curbed production prospects in Ivory Coast.
There has recently, however, been a pick-up in rainfall and the outlook now appears uncertain, they added.
London March cocoa was off 1 pound, or 0.04 percent, at 2,229 pounds a tonne at 1457 GMT. The benchmark second month peaked at 2,236 pounds on Tuesday, its highest since mid-July.
Abundant rain and sunny spells continued for a third week in most of Ivory Coast’s primary cocoa regions, boosting hopes for a healthy main crop amid concerns about the upcoming dry season, farmers said on Monday.
Dealers said the pace of port arrivals in Ivory Coast would be closely watched in coming weeks.
“Up to now (port) arrivals have been pretty steady. The next few sets of arrival data might give an insight into the profile of the crop. Some believe arrivals could drop off quite sharply (due to crop problems),” one dealer said.
New York March cocoa rose $ 16 or 0.5 percent to $ 3,295 a tonne after earlier setting a one-week high of $ 3,299 boosted by a weaker dollar.
Raw sugar futures extended the prior session’s steep gains fuelled by a Brazil cane crush report for the second half of October.
“Two pieces of data in that report surprised the market. One was the low sugar content of the cane caused by wet conditions in the region. The other was the mill’s large allocation to ethanol (instead of sugar),” analyst Tobin Gorey of Commonwealth Bank of Australia said in a market note.
March raw sugar was up 1.3 percent at 14.90 cents after earlier climbing to a one-week high of 15.06 cents.
December white sugar rose 1.3 percent to $ 386.10 per tonne.
Arabica coffee futures edged higher with December up 0.4 percent at $ 1.1680 per lb with background support from concerns that an El Nino weather event could curb production.
Robusta coffee futures eased with January down a marginal 0.1 percent at $ 1,626 a tonne.
