LONDON: New York cocoa futures slid to a one-month low on Tuesday amid growing signs that this year’s strong advance in prices may have finally run out of steam.
COCOA
July New York cocoa was down $83, or 3 percent, at $2,696 a tonne at 1409 GMT after dipping to a one-month low for the second position at $2,676.
“It (New York cocoa) is losing its momentum. The arbitrage (premium to London) is narrowing, it is looking tired,” one London dealer said.
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New York cocoa futures have surged higher this year, with prices climbing to a 1-1/2 year high last month. The market’s premium to London had also climbed to the highest level in more than 40 years.
July London cocoa fell by 39 pounds, or 2 percent, to 1,888 pounds a tonne.
Dealers noted the expiry of the May London contract on Tuesday was providing a focus, with the front month’s discount to July narrowing but remaining substantial.
SUGAR
July raw sugar was up 0.11 cents, or 1 percent, at 11.37 cents per lb.
Dealers pointed to light short-covering by funds, which remain heavily bearish in the commodity.
Participants were also monitoring weather in Brazil, where light rains are expected this week but may not be enough after a recent dry spell, dealers said.
Focus also remained on ample global supplies, though there were signs low prices are filtering through to production.
Thailand has allocated an additional 300,000 tonnes of raw sugar for ethanol production this year, amid weak prices and a large global surplus.
August white sugar fell by $0.30, or 0.1 percent, to $320.80 a tonne.
COFFEE
July arabica coffee fell by 0.85 cents, or 0.7 percent, to $1.1675 per lb.
Focus remained on a large crop from top grower Brazil, though the harvest is expected slightly later than usual, said Ricardo Santos, managing director at Riccoffee.
“We’re probably going to see harvesting activity until October due to the size of the crop,” Santos said. “But one thing is for certain – there is a lot of coffee.”
Quality also appears to be good, but the slump in global prices could inspire Brazilian growers to take less care when harvesting, Santos said.
“At the moment, the quality of the coffee on the trees looks very good,” he said. “But the final quality depends on how farmers will process that coffee.”
July robusta coffee fell by $15, or 0.9 percent, to $1,727 a tonne.
Source: Brecorder
