New York cocoa rises to nine-month highs on short-covering

NEW YORK/LONDON: New York cocoa futures on ICE climbed on Monday to their highest in nearly nine months on a continued short-covering rally, while raw sugar futures fell and arabica prices inched lower.

COCOA

May New York cocoa settled up $17, or 0.7 percent, at $2,430 a tonne. The contract touched a July 2018 peak of $2,443.

This was the contract's eleventh positive finish in 12 sessions. Prices have been lifted by a sustained short-covering rally, dealers said.

Total open interest fell on Friday by 4,100 lots to 251,304 lots, ICE data show.

Speculators cut their bearish stance on cocoa on ICE Futures U.S. by 8,946 lots to 45,529 lots in the week to April 2, U.S. government data showed on Friday.

"The funds that are short are getting out ... but the million dollar question is, do the funds want to go long?" said one U.S. trader.

May London cocoa settled down 15 pounds, or 0.8 percent, at 1,795 pounds a tonne.

Cocoa arrivals at ports in top grower Ivory Coast reached 1.748 million tonnes between Oct. 1 and April 1, exporters estimated, up about 15 percent year on year.

Above-average rainfall last week in most of Ivory Coast's cocoa regions should boost the April-September mid-crop but strong winds are worrying, farmers said.

SUGAR

May raw sugar settled down 0.19 cent, or 1.5 percent, at 12.57 cents per lb. On Friday, the contract touched a more than two-week peak of 12.84.

Prices were capped by producer selling above 12.80 cents and data showing a larger than expected cut in the speculative net short position, dealers said.

"The reduction of the net short speculative position has taken away some of the upward pressure off the market," Sucden Financial senior trader Nick Penney said.

Strong prices in the European Union helped underpin the market, however.

Spot sugar prices in the European Union are recovering from last year's record lows as world prices languish, prompting a pick-up in imports to one of the few global regions where output is slumping.

May white sugar settled down $4.10, or 1.2 percent, at $326.20 a tonne.

COFFEE

May arabica coffee settled down 0.25 cent, or 0.3 percent, at 92.95 cents per lb. The contract slumped to a 13-year low of 91.25 cents last week.

The looming harvest in top-grower Brazil, which is expected to be large, continued to weigh on prices, dealers said.

May robusta coffee settled up $6, or 0.4 percent, at $1,426 per tonne.