LONDON: London ICE cocoa futures slipped on Friday, as weakening chart signals inspired speculative buyers to step back, while white sugar rebounded after the prior day’s sharp drop.
COCOA
December London cocoa was down 16 pounds, or 0.9 percent, at 1,706 pounds a tonne by 1122 GMT, after earlier rising to 1,740 pounds.
Prices rallied off lows in the prior session, supported by a wave of speculative buying as chart signals improved.
However, the market’s failure to break above key resistance levels weakened buying momentum and attracted fresh selling, participants said.
“Failure to close on the high yesterday and previous lack of appetite for prices above 1,733 (pounds) may pave the way for a retracement,” Sucden Financial said in a technical note.
Dealers were closely monitoring weather in top grower Ivory Coast, where favourable rains are expected to benefit the next main crop.
The London market also remained vulnerable to origin selling as top grower Ivory Coast has picked up hedging in recent days, dealers said.
September New York cocoa was down $23, or 1 percent, at $2,292 a tonne.
The International Cocoa Organization’s (ICCO) forecast for production from Ivory Coast and Ghana remains unchanged at 2.88 million tonnes for the 2017/18 season.
SUGAR
October white sugar rose $3.80, or 1.2 percent, to $327.90 a tonne on light corrective buying.
The market sold off in the prior session, as prices breached technical support levels, dealers said.
However, the plunge attracted industry buying, which helped the market recover some losses before the close, they noted.
This helped strengthen the technical structure and spurred some follow-through buying on Friday, dealers said.
October raw sugar was up 0.01 cent, or 0.1 percent, at 11.04 cents per lb.
In the prior session, prices tumbled to their lowest since late April, as a weaker Brazilian real and a move below the 10-day moving average soured sentiment.
“The … fall will have filled consumers’ orders at those lower price levels,” Tobin Gorey of the Commonwealth Bank of Australia said in a note. “That may simply mean though that the defences against still lower prices have been depleted.”
COFFEE
September arabica coffee fell 0.35 cent, or 0.3 percent, to $1.0920 per lb.
September robusta coffee climbed $4, or 0.2 percent, to $1,656 a tonne.
Source: Brecorder
