LONDON: New York cocoa futures fell to a 3-year low on Tuesday as favourable weather in West Africa boosted expectations there would be a global surplus in the 2016/17 season and encouraged funds to take more bearish positions.
March New York cocoa was off $24, or 1.0 percent, at $2,394 a tonne at 1451 GMT after setting a low of $2,392, the weakest for the second contract since August 2013.
Speculators have switched to a net short position in London cocoa and cut a net long in New York cocoa, according to data issued on Monday.
"The crop outlook in the key growing countries, especially in West Africa, is so good that the surpluses expected for the current 2016-17 season are being upwardly adjusted," Commerzbank said in market note.
Light rains mixed with sunny spells last week in most of Ivory Coast's cocoa growing regions strengthened the prospect for a main crop, which is expected to exceed last season's, farmers said on Monday.
March London cocoa fell 7 pounds or 0.35 percent to 1,992 pounds a tonne after falling to a 9-month low for the second position of 1,987 pounds. Sugar futures were lower with the focus on Tuesday's expiry of the December whites contract.
"It looks like quite a big one (delivery), probably about 500,000 tonnes," one London dealer said, adding that Central American and Brazilian sugar was likely to be tendered as well as Indian supplies possibly.
Tom Kujawa, co-head of the softs department at Sucden Financial, said the Middle East and China had been mentioned as possible destinations for the sugar.
March raws was off 0.25 cent or 1.2 percent at 21.38 cents per lb while March whites fell $6.60 or 1.2 percent to $560.70 per tonne. Robusta coffee futures were higher with the market supported by delays to the harvest in top producer Vietnam which added to concerns about tightening global supplies.
Light rain is still expected in most of Vietnam's key coffee growing provinces over the next two weeks before the dry season begins, which could slow the ongoing coffee harvest, a state forecaster said on Tuesday.
January robusta coffee futures gained $39, or 1.9 percent, to reach $2,138 per tonne.
Dealers said the market appeared to have resumed its upward trend after a sharp downward correction during the last few days which took prices from a two-year high of $2,199 early last week to a low of $2,009 on Monday.
Arabica coffee futures were also higher with March up 1.05 cent, or 0.6 percent, at $1.6650 per lb.
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