LONDON: London cocoa futures on ICE eased on Tuesday, slipping from a one-year high as technical signals and a firmer British pound put pressure on prices, while arabica coffee edged higher.
COCOA
May London cocoa was down 8 pounds, or 0.5 percent, at 1,700 pounds a tonne by 1227 GMT, after earlier hitting 1,720 pounds, its highest since March 2017.
This followed a surge of more than 4 percent in the prior session amid heavy fund buying inspired by chart signals.
But dealers said the rally had pushed the market to its most technically over-bought level in nearly a decade, prompting some light corrective selling.
"The rally was all to do with fund positioning," said one dealer. "And looking at these technical aspects, we're definitely due a correction."
Prices were also pressured on Tuesday by a firmer British pound.
But dealers also noted selling pressure was limited, as producers in West Africa were well hedged for next season and speculators were cautious to sell aggressively after Monday's short-covering rally.
They also said the market structure remained firm, after the spot contract, which expires next week, had flipped to a premium over the May position on Monday, signalling stronger appetite to take delivery.
May New York cocoa was unchanged at $2,446 a tonne, after falling to $2,408, with a weaker dollar lending support to that market.
Monday's wave of speculative buying pushed prices up over 6 percent to a 16-month high of $2,459.
Fundamentally, focus remained on top producer Ivory Coast amid signs of lower main crop output, although recent rains are likely to help the development of the upcoming mid-crop.
COFFEE
May arabica coffee was up 0.70 cent, or 0.6 percent, at $1.2180 per lb.
Prices were supported by a stronger Brazilian real, which discourages producer selling by diminishing local currency returns on dollar-traded commodities.
Colombia produced 1.21 million 60-kg bags of washed arabica coffee in February, down 6 percent from the same month a year earlier, the National Coffee Growers' Federation said on Monday.
May robusta coffee rose $8, or 0.5 percent, to $1,763 a tonne.
SUGAR
May raw sugar was up 0.05 cents, or 0.4 percent, at 13.61 cents per lb.
A weaker dollar and a firmer real also lent support to that market, although focus remained on ample global supplies.
May white sugar rose $1.10, or 0.3 percent, to $368.20 a tonne.
Comments
Comments are closed for this article.