Cocoa Prices Jump 3.2%

(Wall Street Journal) – Cocoa futures rose more than 3% as forecasts for dry weather in West Africa, the world’s biggest source of cocoa beans, spurred buying.

Cocoa for delivery in September on ICE Futures U.S. gained 3.2% to end at $2,364 a ton, the same settlement high hit on July 19.

Meteorlogix forecast “dry conditions or just a few light showers” in top producers Ivory Coast and Ghana over the next few days, with moisture concentrated in the northern areas. The countries’ main cocoa crop is in its development stage, and too little moisture could limit output in the next harvest. The two nations comprise more than half of global cocoa output.

“The market is rallying on that (weather) news,” said Boyd Cruel, an analyst at brokerage Vision Financial Markets. He added, however, that “we won’t really know for the next couple of months” what the impact on the next crop will be. The 2013-14 season begins in October.

Arabica-coffee futures continued to climb ahead of an announcement expected later Monday by Brazil’s government on measures that would boost coffee prices. Brazil produces about one-third of the world’s coffee. Two large back-to-back harvests in Brazil have helped push futures prices to four-year lows.

Arabica coffee for delivery in September ended 1.2% higher at $1.1965 a pound.

Raw-sugar futures bucked the trend across soft commodities markets, settling 1.4% lower at 16.56 cents a pound. Traders pointed to the weaker Brazilian real, which encourages sales abroad since exporters and producers would receive more reais back for sales in dollars. On Monday, the real traded as low as 2.3065 against the U.S. dollar.

Cotton for delivery in December ended 0.3% higher at 85.20 cents a pound. Orange-juice concentrate for September gained 0.1% to settle at $1.4240 a pound.