White sugar hits two-year high, cocoa steadies

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White sugar futures on hit a two-year high on Monday in holiday thinned trade, boosted by momentum fund buying amid further signs of shrinking supply, while cocoa steadied. US markets were closed for the Martin Luther King day holiday.
March white sugar closed $2.70, or 0.7%, up at $401.50 a tonne after touching its highest since November 2017 at $404. March raw sugar finished up 0.1% on Friday, having hit a two-year high of 14.58 cents on Thursday.
Speculators switched to a net long position of 35,987 raw sugar contracts in the week to Jan. 14, adding 57,210 long contracts, CFTC data showed. Dealers said the data came in at the bottom end of , meaning speculators have plenty of capacity to buy more.
“We expect a test of 15 cents in the short to near term. The market is attracting funds on the long side as (it) is forecast to be in deficit this year and ‘needs to rally’ to draw out sugar away from the ethanol market,” Sucden Financial said.
Sugar deficit forecasts for 2019/20 are being revised up amid shrinking output in key regions such as India and Thailand, though high prices could eventually prompt India to export its pricey surplus stocks and tempt to produce more sugar.
March London cocoa finished down 4 pounds, or 0.2%, at 1,999 pounds a tonne as the market adjusted after hitting its highest since early December on Friday. March New York cocoa, settled up 3.1% on Friday, having touched a 1-1/2 year high of $2,808.
Speculators extended their net long position in New York cocoa to 35,987 contracts in the week to Jan. 14, adding 57,210 long contracts. Worries over dry weather in top grower Ivory Coast coupled with strong in Asia are lifting cocoa, overshadowing poor in Europe and the United States.
Light showers in some of Ivory Coast’s cocoa regions last week are likely to have boosted the April-to- mid-crop, while heavier rain is needed elsewhere, told Reuters. Commodity trader Olam, a major player in cocoa, is dividing its products portfolio into two new businesses with the potential to spin out each unit and list them separately.
March robusta coffee finished $14, or 1.1%, down at $1,305 a tonne, having hit its lowest since early November.
March arabica coffee ended 1.2% down on Friday after touching a two-month low of $1.1135. Speculators cut their net long positions in arabica by 4,199 contracts to 16,708 in the most recent week. Arabica has been sliding off December’s more than two-year peak, with ICE certified stocks rising sharply this year after a steep and prolonged decline in 2019.
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