(Reuters) – New York cocoa on ICE rose for a sixth day running on Thursday, trading at the highest level in nearly seven months, buoyed by chart-based buying and sterling’s steady rise to its highest against the dollar this year.
Raw sugar futures extended losses after sinking more than 4 percent in heavy volume on Wednesday, pressured by larger Brazilian crop forecasts as the industry gathered in New York. Coffee futures rose as the U.S. dollar weakened..
In cocoa, the stronger pound, buoyed by the Conservative majority in last week’s UK election, helped to drive dollar-based New York cocoa futures higher.
“With the pound strengthening, there is a natural tendency for the market to adjust through arbitrage,” one senior London-based cocoa futures broker said.
New York July cocoa settled up $32, or 1.1 percent, at $3,088 a tonne, extending gains post-settlement to $3,098, the highest since Oct 23.
London July cocoa rose 14 pounds, or 0.7 percent, to close at 2,049 pounds a tonne.
Dealers noted a large London May cocoa delivery, which some viewed as bearish due to the discount that the then-spot contract held up until this week versus July, while others said it could be bullish if there is a home for the beans.
“There’s nothing that can really stop the cocoa market, especially with the dollar’s downtrend,” said Nick Gentile, managing partner at commodity trading adviser NickJen Capital in New York.
Some traders said the increased chance of El Nino lasting through the Northern Hemisphere summer, according to a U.S. weather forecaster, also provided some market support. The weather phenomenon raises the chance of heavy rain in South America and scorching heat in Asia, which could devastate some crops.
Raw sugar futures fell, weighed on by forecasts for higher output in top grower Brazil.
“There seems little to challenge the hegemony of the compelling medium-term ‘bear’ story of sugar abundance,” said Thomas Kujawa, co-head of the softs desk at Sucden Financial Sugar.
July raw sugar finished down 0.12 cent, or 0.9 percent, at 12.84 cents a lb, extending losses from the 2-1/2-month high reached on Wednesday at 13.60 cents.
August white sugar on ICE closed unchanged at $370.10 a tonne.
Arabica futures firmed, with July ending up 2.1 cents, or 1.6 percent, at $1.375 per lb.
July robusta coffee closed up $23, or 1.3 percent, at $1,747 a tonne.
