NY cocoa gives up half of Wednesday’s gains, coffee also dips

Shoaib Ur Rehman December 28, 2018

NEW YORK/LONDON: New York cocoa futures on ICE on fell on Thursday as prices corrected following a surge in the previous session to a more than five-month high, while arabica coffee was also lower after rising on Wednesday.

COCOA

* March New York cocoa settled down $56, or 2.3 percent, at $2,373 per tonne.

* This wiped roughly half of the gains made in the previous session, when prices surged more than 5 percent to $2,436. Prices had risen on both chart-based buying and on dry weather in top grower Ivory Coast.

* Market participants are trying to balance mounting worries that the Harmattan winds could reduce Ivorian output against data indicating that port arrivals in the country are much higher than they were last year, said Jack Scoville, vice president of Price Futures Group.

* On the relative strength index, the contract retreated from the near-overbought levels it had reached on Wednesday.

* “The move yesterday was clearly exaggerated,” said one European dealer. “But the funds seem to want to be long. They’re moving towards being net long.”

* March London cocoa settled up 49 pounds, or 2.9 percent, at 1,753 pounds per tonne.

* Prices earlier climbed to 1,761 pounds per tonne, the highest for the front month since July 18, in part on arbitrage buying, dealers said.

* “London is playing catch-up after being closed yesterday,” said Scoville.

COFFEE

* March arabica coffee settled down 2.15 cents, or 2.1 percent, at $1.0175, erasing the prior session’s gains when the contract peaked at $1.0390.

* Wednesday’s rally appears to have been driven by short-covering, dealers said.

* Expectations of plentiful global supplies have been weighing on prices and helped push the spot contract to a three-month low of 98.60 cents last week.

* Prices are encountering resistance around the $1.04 level, as the March contract has made several attempts in recent sessions to break through it, dealers said.

* March robusta coffee settled down $7, or 0.5 percent, at $1,508 per tonne.

* Exports from Vietnam, the world’s top robusta producer, are expected to increase 20.1 percent in 2018 from the year before, government data showed.

SUGAR

* March raw sugar settled down 0.14 cent, or 1.1 percent, at 12.25 cents per lb.

* Lower oil prices, falling on record crude production and signs of faltering global economic growth, weighed on sugar, dealers said.

* March white sugar settled down $1.80, or 0.5 percent, at $335.90 per tonne.

Copyright Reuters, 2018
 

 

 

 

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