(Reuters) – New York cocoa futures slid to a 3-year low on Monday weighed down by technically-driven selling, a generally favourable crop outlook in West Africa and a stronger dollar.
March New York cocoa on ICE Futures U.S. was down $30 or 1.2 percent at $2,502 a tonne at 1211 GMT after dipping to a low of $2,501, the weakest for the second position since September 2013.
Dealers said the mood was very bearish after the market’s poor performance on Friday when it fell sharply in heavy volume, breaking major support levels.
“After such an event it is very much under pressure again. Technically it looks quite ugly,” one London dealer said.
Dealers said the weather also remained favourable for crops in top producer Ivory Coast while a stronger dollar added to downward pressure on prices.
March London cocoa futures fell 18 pounds or 0.9 percent to 2,054 pounds a tonne.
Arabica and robusta coffee futures extended recent gains.
Dealers said the recent run-up in the arabica market was driven largely by fund buying with the crop outlook in top producer Brazil boosted by recent rains.
Speculators upped a bullish position in arabica coffee to just below February 2008’s record high in the week to Nov. 1 on ICE Futures U.S., government data showed on Friday.
December arabica coffee was up 0.95 cent or 0.55 percent at $1.7230 per lb after peaking at $1.7430, the highest for front month since January 2015.
“It remains to be seen whether the latest rally will soon run out of steam. The rainy season has meanwhile begun in Brazil,” Commerzbank said in a market note.
“Blossoming is described as promising. There is reason to hope that the next arabica crop will be a good one, despite this being the lower-yield year of the two-year cycle.”
Dealers said Brazil robusta areas remained dry, however, adding to concerns about tight supplies as they kept a close watch on delays to the harvest in Vietnam.
January robusta coffee rose $3 or 0.1 percent to $2,191 a tonne after peaking at a two-year high of $2,199.
Raw sugar futures were higher as rains disrupted cane crushing in top producer Brazil.
“Weather forecasters expect some more rain in Sao Paulo and surrounds this week. The market will be watching to see that it doesn’t become too heavy for too long and threaten an abrupt end to the crushing in Brazil,” analyst Tobin Gorey of Commonwealth Bank of Australia said.
March raw sugar was up 0.32 cent or 1.5 percent at 22.05 cents per lb.
December white sugar was $0.50, or 0.1 percent, higher at $574.90 a tonne.
