LONDON: New York cocoa futures rose sharply on Monday, climbing to a 1-1/2 year high, as funds added to long positions, while raw sugar prices were also higher.
July New York cocoa was up $91, or 3.5 percent, at $2,667 a tonne at 1347 GMT after climbing to a peak of $2,688, the highest for the second month since October 2016.
Dealers said a weak dollar helped to prompt initial gains and a subsequent surge in buying was largely technically-driven.
“Currency helped to set it on the road,” one dealer said, adding there did not appear to be any fundamental factors behind the run-up in prices.
Dealers said speculators were adding to long positions with their bullish stance already at a nearly two-year high, as of April 10, US government data showed on Friday.
Dealers said first quarter grind data should provide a focus this week.
Europe’s Q1 grind, scheduled to be issued on Wednesday, is expected to show a year-on-year rise of two to four percent. The grind showed year-on-year increases in every quarter last year.
North American grind data is due to be released on Thursday, with estimates ranging from 1.5 percent lower to 2 percent higher.
July London cocoa rose 41 pounds, or 2.3 percent, to 1,805 pounds a tonne with gains capped by the strength of sterling.
May raw sugar rose 0.10 cent, or 0.8 percent, to 12.18 cents per lb, pulling away from last week’s 2-1/2 year low of 11.93 cents.
Dealers said the scope for a significant recovery in prices appeared limited, however, as the market continues to struggle to absorb excess supplies.
“Short-term supply remains strongly bearish. The seasonal rainfall outlook for India remains around/slightly above average which should allow for good levels of production,” Marex said in a market note.
“Additionally, any bullish concerns regarding late beet sowings in NW Europe have been alleviated as weather conditions have substantially improved and are forecast to remain fine and dry over the coming weeks.”
August white sugar rose $4.40, or 1.3 percent, to $343.40 per tonne after dipping to a low of $336.80 – the weakest for the front month since September 2015.
Commodities trader ED&F Man bought 140,750 tonnes of white sugar against the May contract on ICE Futures Europe which expired on Friday, according to the company and exchange data, confirming earlier trade reports.
July arabica coffee was down 0.50 cent, or 0.4 percent, at $1.19 per lb.
July robusta coffee was down $1 at $1,735 a tonne.