(Reuters) – London cocoa futures fell on Monday, weighed down by a sharp rise in sterling, although the market was underpinned by the prospect of a large global deficit in the current 2015/16 season.
Raw sugar futures were lower, with drier conditions in Centre-South Brazil set to improve the cane crush in the world’s top producer, while arabica coffee prices also eased.
London September cocoa fell 19 pounds, or 0.8 percent, to 2,249 pounds a tonne by 1123 GMT.
“Substantial currency movements and thin volumes are leading to very choppy conditions,” one London dealer said.
Sterling rose sharply on Monday as worries eased that Britain might vote to leave the European Union at a June 23 referendum.
New York September cocoa rose $42, or 1.4 percent, to $3,112 per tonne.
Dealers said the prospect of lower production in Ivory Coast this season following drier weather and an anticipated global deficit in 2015/16 continued to underpin prices.
“The fundamental concerns are still there,” one dealer said.
Cocoa arrivals at ports in top grower Ivory Coast reached around 1.37 million tonnes by June 19 since the start of the season, exporters estimated on Monday, down from 1.52 million in the same period a year earlier.
Raw sugar futures fell back after last week’s advance to the highest levels in more than 2-1/2 years.
July raw sugar was off 0.21 cent, or 1.1 percent, at 19.55 cents per lb. The front month had rose to a peak of 20.15 cents last week, its highest level since October 2013.
“Weather conditions in CS Brazil are good for the crush and the logistical backlog caused by the rains in the first half of the month seems to be easing,” Nick Penney, senior trader with Sucden Financial, said.
“The market seems to be consolidating in a range of 19 to 20 cents.”
Speculators raised their net long position in sugar contracts to a fresh record on ICE Futures U.S. in the week ended June 14, U.S. Commodity Futures Trading Commission data showed on Friday.
August white sugar was off $2.50, or 0.5 percent, at $533.50 per tonne.
Arabica coffee futures also fell as drier weather in Brazil diminished quality concerns linked to recent rains.
September arabica futures were off 1.85 cents, or 1.3 percent, at $1.41 per lb.
September robusta coffee was down $3, or 0.2 percent, at $1,671 per tonne.
