(Reuters) – London cocoa futures eased on Tuesday, under pressure from a stronger pound after European grind data came out in line with expectations, while sugar remained firm, underpinned by a shift of the global market into deficit.
Arabica futures edged up, supported by concerns over quality of new crop Brazilian beans.
London cocoa futures ignored European cocoa grind data, which came in around expectations of a 5 percent rise.
Europe’s second-quarter cocoa grind rose 4.9 percent from the same period last year to 324,968 tonnes, the Brussels-based European Cocoa Association said on Tuesday.
“The European grind was broadly in line with expectations. It’s a function of lower grind in origin – lower availability of good quality beans, so more grind in Europe,” said Eric Sivry, head of agri options brokerage at Marex Spectron.
Sivry said the firmer pound weighed on sterling-denominated London cocoa futures.
London September cocoa was down 20 pounds, or 0.8 percent, at 2,477 pounds a tonne at 1149 GMT.
“The currency has a greater impact on the London market than the grinds themselves,” he said.
A stronger pound makes sterling-based cocoa positions more expensive for holders of alternative currencies.
Sterling rose along with UK government bond yields on Tuesday as the early anointing of interior minister Theresa May as prime minister fed into a generally improved global mood among financial investors.
North American second-quarter grind data will be released on Thursday, with dealers estimating a roughly 5 percent rise, which would be the first year-over-year gain in seven quarters.
New York September cocoa was up $10, or 0.3 percent, at $3,111 per tonne.
Raw sugar futures firmed as dealers focused on expectations for a moderate delivery of South and Central American white sugar against expiry of the August contract on Friday.
“The fundamentals do point to a deficit over the 2015/16 and 2016/17 crop cycles at a time when stocks are being run down,” said Michael Liddiard of consultancy Agrilion.
October raw sugar was up 0.05 cent, or 0.25 percent, at 20.33 cents per lb.
October white sugar was up $0.50, or 0.1 percent, at $556.80 per tonne.
September arabica coffee was up 1.05 cent, or 0.7 percent, at $1.5035 per lb, after reaching $1.5140, the highest since February 2015.
September robusta coffee was down $8, or 0.4 percent, at $1,821 per tonne.
