LONDON: Cocoa futures on ICE rose on Wednesday as stronger-than-expected grind data signalled demand may be improving while raw sugar extended the prior session's gains on fund short covering.
COCOA
December London cocoa was up 27 pounds, or 1.75 percent, at 1,574 pounds by 1349 GMT, after hitting a session high of 1,579 pounds.
December New York cocoa rose $34, or 1.7 percent, to $2,079 a tonne.
Europe's third-quarter cocoa grind rose 3 percent from the same period last year to 353,544 tonnes, the Brussels-based European Cocoa Association said.
The figure represented the highest quarterly grind in six years, according to Commerzbank.
The grind was higher-than-expected since last year's third-quarter figure was particularly strong, said Jonathan Parkman, head of agriculture at Marex Spectron.
"This is clearly more than pipeline-filling. It's pretty obvious to me we are consuming significantly more cocoa than we were," Parkman said. "It's not rampantly bullish but it's reassuringly friendly."
Overall, market participants have been expecting low prices to spur stronger global grindings, but this was seen as mostly driven by West Africa and Asia, rather than Europe.
"It is definitely a function of lower prices," Parkman said. "But it's also a function of the fact that we've got a carry back in the market, which makes it easier for the processors."
Dealers are now awaiting grind figures from North America, due out next week.
SUGAR
March raw sugar rose 0.13 cents, or 0.9 percent, to 14.30 cents per lb.
Dealers said the market run-up during the last couple of days had been fuelled by fund short covering and a lower than expected cane crush in Centre-South Brazil.
Prices, however, remained well within its recent trading band with resistance seen around 14.50 cents.
"Producer pricing continues to cap any advance and absorb short covering by the faster moving funds and speculators," Sucden Financial senior trader Nick Penney said in a daily market update.
December white sugar was up $3, or 0.8 percent, at $375.80 a tonne.
COFFEE
December arabica coffee fell 2.90 cents, or 2.2 percent, to $1.2810 per lb.
Dealers said an improving outlook for next year's crop in Brazil following recent rains was helping to keep the market on the defensive.
Brazil exported an "unexpectedly low" volume of coffee in September, recording a 24 percent decline year-on-year, exporters association Cecaf? said on Tuesday, as farmers hold out for higher prices.
November robusta coffee fell $36, or 1.8 percent, to $1,971 per tonne.
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