LONDON: Raw cocoa futures on ICE rose on Monday, extending gains as upbeat chart signals inspired further speculative short-covering, while London cocoa prices climbed off 5-month lows.
SUGAR
October raw sugar was up 0.22 cent, or 2 percent, at 11.07 cents per lb by 1026 GMT, after hitting a session high of 11.13 cents.
Prices rallied sharply in the prior session, boosted by a stronger Brazilian real and a wave of short-covering by speculators, as prices hit a three-year low last week.
Friday’s strong close attracted further speculative buying on Monday, which took prices above the key 11 cent resistance level, dealers said.
The market was also supported by expectations that speculators may have over-extended their bearish stance, as data showed they again boosted their short position in the week to July 31.
Dealers said prices were boosted by concerns about the impact of drought in the European Union, coupled with prolonged dryness in centre-south Brazil.
“In the EU’s case, beet is a moderately drought resistant crop, but the elevated temperatures for quite a lengthy period is an uncommon occurrence,” commodity analyst Green Pool said in a market update. “It will undoubtedly take some toll on yields.”
Participants were also closely monitoring India, where lower rainfall has raised concerns about the crucial monsoon season.
October white sugar was up $4.10, or 1.3 percent, at $328.40 a tonne.
COCOA
December London cocoa was up 10 pounds, or 0.2 percent, at 1,597 pounds a tonne.
Prices fell to a fresh five-month low in early trading before rebounding on technically-driven buying, dealer said.
September New York cocoa was up $10, or 0.5 percent, at $2,056 a tonne, after earlier touching its lowest since mid-February.
Both markets have been under persistent pressure in recent sessions, as speculators continue to liquidate long positions, dealers noted.
Focus was on weather in West Africa, where crop friendly rains have boosted expectations for a good start to the main crop.
Warehouse deliveries of cocoa from Brazil’s main growing regions and from imports were down 12 percent from May 1 to July 29 compared to a year earlier, Bahia Commercial Association data showed.
COFFEE
September robusta coffee rose $4, or 0.24 percent, to $1,666 a tonne.
September arabica coffee rose 0.15 cent, or 0.14 percent, to $1.0790 per lb.
Speculators cut a record net short position in the commodity in the week to July 31.
Source: Brecorder
