(Reuters) – Cocoa futures rose on Wednesday, with the London July/September spread rallying for the fourth straight day to a contract high, underpinned by tightening supplies following a poor mid-crop in top grower Ivory Coast.
Raw sugar futures fell to a two-week low, changing direction on late-day selling, after being supported by forecasts for cold weather in top grower Brazil, which also helped lift coffee prices, traders said.
September London cocoa settled up 23 pounds, or 0.9 percent, at 2,491 pounds per tonne.
The July contract, which expires on Thursday, rose to a premium of as much as 86 pounds over September, the highest for the spread LCCN6-U6.
Dealers said this reflected the tightening supply outlook exacerbated by the prospect of a slow start to the main crop later this year.
“The ongoing dry weather and potential slow start to the new crop is reflected in the strong spreads, especially what is going on in July/Sep,” a London dealer said.
September New York cocoa settled up $29, or 0.9 percent, at $3,143 per tonne as it continued to fill a chart gap created when the market opened sharply lower on June 24.
“We delved into the gap which was created on the day after the (EU) referendum. It is on a mission now to fill that gap,” the London dealer said.
Dealers said second-quarter North American grind data on Thursday would also provide a short-term focus. Dealers are estimating a 5 percent rise, which would mark the first year-over-year gain in seven quarters.
Raw sugar futures turned lower in the final 20 minutes of trade as late-day selling came into the market.
“Just the mention of cold has an element of upside to it. Seems like no threat at this time though,” said one U.S. trader about the reason behind the market’s earlier strength.
October raw sugar on ICE settled down 0.24 cent, or 1.2 percent, at 19.48 cents per lb after falling to a two-week low at 19.37 cents.
October white sugar settled down $5.40, or 1 percent, at $538.80 per tonne.
The August contract, which expires on Friday, fell to a discount as large as $10 to October. This was in sharp contrast to its $1.80 premium on Wednesday.
Dealers said this indicated little appetite to take delivery.
September arabica settled up 0.25 cent, or 0.2 percent, at $1.4765 per lb and September robusta settled up $7, or 0.4 percent, at $1,816 per tonne.
