NY Cocoa Drops Below $3,000 Per Tonne, Pressured by Weak Sterling
Category: Cocoa
(Reuters) – New York cocoa futures on ICE fell below $3,000 per tonne for the first time in two weeks on Tuesday, as the weak British pound pressured prices and extended losses below key technical levels.
Arabica coffee futures turned lower as the coffee region in top grower Brazil warmed slightly after an unexpected moderate frost hit parts of its main growing region on Monday. Sugar was little changed after a volatile session that was briefly buoyed by talk of a forecast for dry conditions in Brazil to curb production.
September New York cocoa settled down $87, or 2.8 percent, at $2,998 per tonne, falling below the 200-day and then the 50-day moving averages.
Traders said the dollar-traded market was pressured by the weak sterling, which fell against the greenback amid expectations for the Bank of England to ease monetary policy.
September London cocoa settled down 33 pounds, or 1.3 percent, at 2,437 pounds per tonne.
Coffee prices also fell, with September arabica closing down 2.9 cent, or 1.9 percent, at $1.4655 per lb.
Traders said they were closely monitoring temperature forecasts in Brazil after Monday’s surprise frost.
“Dry conditions in most areas this week will maintain favorable conditions for coffee harvesting,” said Maryland-based MDA Information Systems in a weather forecast report.
“Temperatures will be a touch below normal this week but will remain above frost levels.”
September robusta settled down $2, or 0.1 percent, at $1,812 per tonne.
Robusta futures were underpinned by a poor harvest in Brazil, a late start to harvesting in Indonesia, and concerns over the impact of adverse weather on output in top grower Vietnam.
October raw sugar on ICE settled down 0.01 cent, or 0.05 percent, at 19.36 cents per lb, holding above Monday’s three-week low of 19.13 cents.
“As long as it remains dry, the market remains capped,” one analyst with a broker said, referring to Brazil’s main center-south region.
Another broker said he expected Brazilian cane industry data to show a rapid crush in the first half of July, adding that the market was “over-long”.
“It seems we will be drifting lower in the short term,” said Tom Kujawa, co-head of the softs department at broker Sucden Financial Sugar.
“We seem most likely to test 19 cents a lb.”
October white sugar settled up $1.50, or 0.3 percent, at $535.50 per tonne.
