Thursday, 12 November 2015 00:48
NEW YORK/LONDON: London cocoa futures on ICE inched up to the highest in more than 4-1/2 years on Wednesday, extending a month-long rally on chart-based buy signals, while New York prices reached a seven-week high on heavy December/March spreading.
Raw sugar futures turned slightly lower after initially extending the prior session’s steep gains, buoyed in part by earlier strength in top grower Brazil’s currency, with buying momentum fading around the key 15-cent level.
Coffee prices were little changed, trading within the prior session’s ranges on a lack of new fundamentals.
Dealers said the cocoa market’s run-up had been fueled by concerns that dry weather in August and September could have curbed production prospects in top grower Ivory Coast, but that a recent pick-up in rainfall makes the outlook appear uncertain, they added.
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London March cocoa settled up 12 pounds, or 0.5 percent, at 2,242 pounds per tonne, after peaking just one tick higher at 2,243 pounds, the highest on a continuation chart since March 2011.
Dealers said the heavy pace of port arrivals in Ivory Coast would be closely watched in coming weeks, with some expecting it to begin tailing off.
“Some believe arrivals could drop off quite sharply (due to crop problems),” one dealer said.
New York March cocoa settled up $ 34, or 1 percent, at $ 3,313 per tonne, just below the session high at $ 3,315, the highest since Sept. 23.
Sugar extended Tuesday’s 6.3 percent rally that some said was fueled by a Brazil cane crush report that showed low sugar content.
“There’s an increased chance there will be some sort of decision and announcement on exports,” said James Cassidy, global head of sugar for Societe Generale in New York, referring to talk of a possible subsidy announcement in India next week.
“Not a lot of people are willing to trade on that but it does enter your mind when you’re banging on 15 cents again.”
March raw sugar settled down 0.02 cent, or 0.1 percent, at 14.69 cents per lb, after climbing to a one-week high of 15.06 cents.
December white sugar settled down 70 cents, or 0.2 percent, at $ 398 per tonne. The white-over-raw premium fell a steep 14 percent from just a week prior to around $ 57 per tonne.
Arabica coffee futures edged higher with March settling up 0.45 cent, or 0.4 percent, at $ 1.2015 per lb.
January robusta coffee settled up $ 4, or 0.25 percent, at $ 1,632 per tonne.
