Cocoa sets 1-month high then turns lower, sugar also falls
Category: Cocoa
(Reuters) – Cocoa futures rose to a one-month high on Friday before stalling, but prices remained underpinned by concern that adverse weather in Ivory Coast could limit the scope of an anticipated rebound in production in the 2016/17 season.
Sugar futures were lower, hurt by a firmer dollar and softer crude oil prices, while arabica coffee prices also weakened.
December London cocoa was off 9 pounds or 0.4 percent at 2,446 pounds a tonne at 1228 GMT after earlier climbing to 2,458 pounds a tonne, a one-month peak for the benchmark second month and also a contract high.
Dealers said there should be a clearer indication of crop prospects in Ivory Coast in the next four to six weeks but a significant rise in production is needed if current forecasts for a global surplus in the 2016/17 season are to be maintained.
“Most market observers envisage a supply surplus in 2016/17, primarily thanks to significantly higher cocoa production in Ivory Coast,” Commerzbank said in a market note on Friday.
“Having said that, most growing areas have seen too little sunshine in recent weeks, which has doubtless hampered the development of the cocoa beans for the upcoming main crop. Some cocoa farmers therefore expect the 2016/17 crop season to get off to a weak start.”
December New York cocoa was off $18 or 0.6 percent at $3,095 a tonne.
Sugar futures turned lower as the dollar edged up and crude oil prices fell.
ICE Oct raw sugar fell 0.14 cent, or 0.7 percent, to 19.84 cents per lb but was still on track for a small weekly gain of less than 1 percent.
Dealers said the market was drifting in a range of around 19.50 to 20.50 cents a lb.
October white sugar was off $4.40, or 0.8 percent, at $531.20 per tonne.
Arabica coffee futures also fell, with December off 0.35 percent at $1.4110 per lb although the contract remained on track for a weekly gain of about 0.5 percent.
Dealers said nearby supplies remained ample with the harvest in Brazil now in its final stages.
September robusta coffee was off 0.2 percent at $1,785 a tonne.
