London cocoa slips from one-month peak on producer selling
Category: Cocoa
(Reuters) – London cocoa futures turned lower on Wednesday on producer selling after reaching their highest level in more than a month.
Dealers said Ghana-related selling helped to temporarily stall the advance but the mood remained upbeat with a large deficit seen in the current 2015/16 season and an uncertain outlook for 2016/17.
December London cocoa fell 3 pounds or 0.1 percent to 2,428 pounds a tonne by 1135 GMT. The second month earlier rose to 2,436 pounds, its highest since mid-July.
Dealers said they were keeping a close watch on prospects of the upcoming 2016/17 main crop in West Africa with some concerns that dry weather could hurt pod setting and survival rates.
“We should get a more accurate picture (on the main crop) in the next four to six weeks,” one dealer said.
“We think the main crop will be a bit late and for the first part (of the season) arrivals will be behind last year but we will see if it can catch up in Jan, Feb, March (of 2017),” the dealer added.
December New York cocoa slipped $6 or 0.2 percent to $3,053 a tonne.
Arabica coffee futures were also lower, with December down 0.2 percent at $1.4050 per lb.
Dealers said the market was weighed down by a slightly firmer dollar and ample availability with the harvest in top producer Brazil now in its final stages.
Brazil’s largest coffee co-operative Cooxupe said on Tuesday that 82 pct of the crop in its region of activity had been harvested by Aug. 12, up from 73 pct a year ago.
September robusta coffee was off 0.4 percent at $1,768 a tonne.
Sugar futures joined the retreat with ICE Oct raws off 0.12 cent, or 0.6 percent, at 20.14 cents per lb.
Dealers noted front month October continued to trade at a substantial discount to March, a reflection of ample nearby supplies with demand sluggish and the cane crush in Centre-South Brazil continuing at a strong pace.
“However, should rain re-appear in CS Brazil or should the crushing season come to an end sooner than expected, things could change rapidly,” Sucden Financial senior trader Nick Penney said.
October white sugar was off $2.60, or 0.5 percent, at $541.90 per tonne.
