LONDON: New York cocoa futures rose on Tuesday, boosted by technical buying and signs of recovering demand, while raw sugar slipped as bearish chart signals weighed on the market.
COCOA
March New York cocoa was up $21 or 1.1 percent, at$1,935 a tonne by 1141 GMT.
Dealers said the New York market, which reopened on Tuesday after the Martin Luther King Jr. Day holiday, was catching up with gains made in London on Monday.
On Monday, data also showed Europe’s grindings rose to a record for the fourth quarter in a data set going back to 1999.
However, dealers said the market was cautious amid signs of another year of strong production in top grower Ivory Coast.
“People are cautious because yes, the arrivals do look strong,” said one dealer. “What will prevent a surplus as big as what we had last year is the demand. Otherwise, I think we’re heading for a very good crop.”
The market is now awaiting figures from North America and Asia, due out on Thursday. Dealers are anticipating a 1-3 percent rise in North America and at least a 5 percent increase in Asia.
March London cocoa fell 10 pounds, or 0.7 percent, to 1,394 pounds a tonne, giving up some of Monday’s gains.
SUGAR
March raw sugar was down 0.15 cent, or 1.1 percent, at 14.03 cents per lb, catching up with a drop in white sugar on Monday.
Dealers noted prices were weighed down by bearish chart signals after the market’s structure was battered in last week’s speculative sell-off.
“The bears will be targeting a breach of 14.00 this week, with a potential downside target of 13.70,” Geordie Wilkes, technical analyst at Sucden Financial, said in a note.
A looming supply glut for 2017/18 – and potentially further ahead – was also dampening sentiment.
Dealers also said the market was vulnerable to producer selling, as some had missed the opportunity to sell into the rally earlier this month.
March white sugar was down $1.90, or 0.5 percent, at $375 a tonne.
COFFEE
March arabica coffee was down 1.05 cents, or 0.9 percent, at $1.2120 per lb, after touching $1.2085, its lowest since Dec. 26.
Dealers noted the technical structure was weakened on Friday, the market’s last trading session, when prices slipped below key support levels.
March robusta coffee was up $3 or 0.2 percent at $1,732 a tonne.
Source: Brecorder.com
