Cocoa at 1-Month High as Prices May Have Bottomed
Category: Cocoa
(Businessweek) – Cocoa climbed to a one-month high in London on speculation prices that declined in the past three months have reached a bottom, prompting some speculators to re-enter the market and buy futures. Coffee slid.
Money managers boosted bets on rising prices for cocoa traded in London for a second consecutive week in the seven days ended March 5, according to NYSE Liffe, the derivatives arm of NYSE Euronext. Cocoa, coffee and sugar are forming bottoms, Tiberius Asset Management AG said in a report e-mailed yesterday. While selling is no longer “dramatic,” buying has yet to “set in,” Tiberius said.
“After a long period of consolidation within a small range, cocoa has started to come back up on the idea that the bottom is behind us,” Jerome Jourquin, head of agricultural commodity derivatives at brokerage Aurel BGC in Paris, said by e-mail today. “Some long-only funds have entered the market as the risk/reward on a long position appears reasonable.”
Cocoa for May delivery gained 1.1 percent to 1,467 pounds ($2,179) a metric ton by 10:22 a.m. on NYSE Liffe in London, after touching 1,469 pounds, the highest for a most active contract since Feb. 7. The beans used to make chocolate fell 1.3 percent last month, 0.5 percent in January and 9.5 percent in December. In New York, cocoa for May delivery rose 0.8 percent to $2,146 a ton on ICE Futures U.S.
Money managers’ net-long position, or bets on higher prices, in London cocoa stood at 11,406 futures and options in the week ended March 5, NYSE Liffe data showed. That’s up from 10,780 contracts a week earlier. Bets on rising prices climbed after reaching an 11-month low in the week ended Feb. 19.
White sugar for May delivery was little changed at $535.30 a ton on NYSE Liffe. Raw sugar for May delivery fell 0.1 percent to 18.81 cents a pound on ICE.
Robusta coffee for delivery in May was down 0.8 percent to $2,173 a ton in London. Arabica coffee for delivery in May slid 0.7 percent to $1.428 a pound in New York.
