LONDON: Cocoa futures on the ICE exchange surged on Monday, heading back to last week’s 3-1/2-month highs, while raw sugar rose for a second session amid gains in oil prices.
COCOA
New York cocoa rose 8.1percent to USD4,519 a metric ton at 1040 GMT, reversing Friday’s 5.5percent loss and heading back near last week’s 3-1/2-month high of USD4,554.
Dealers said supportive technical signals continue to spur speculators to cover their short positions by buying cocoa futures. They also cited worries over the looming El Nino weather phenomenon, and a lack of flower formation on West African cocoa fields. “Some analysts are starting to lower their (2026/27 crop) expectations. However, World Weather says it may take until next year before adverse weather affects production,” said broker ADMIS.
London cocoa rose 8.5percent to 3,377 pounds a ton, reversing Friday’s 5.5percent losses and heading back to last week’s 3-1/2-month peak of 3,414 pounds.
SUGAR
Raw sugar rose 0.5percent to 14.76 cents per lb, having lost 1.7percent last week. “Much focus (in sugar) remains on falling ethanol prices in Brazil, and the developing El Niño situation,” said analyst Green Pool. It added: “The bears see sugar falling in line with ethanol – but the pace of falling has slowed, partly due to the stronger Brazilian real.” Falling ethanol prices are bearish for sugar as they can encourage cane mills to produce more sugar and less ethanol.
A strong real is also bearish as it deters selling dollar-priced sugar by lowering returns in local currency terms. White sugar edged up 0.1percent at USD432.30 a ton.
COFFEE
Arabica coffee fell 0.7percent to USD2.7295 per lb after setting a fresh 1-1/2-year low of USD2.68. A bumper crop is expected this year from top grower Brazil. Brazilian coffee exports fell 1.1percent in April to 2.85 million bags. Robusta coffee dipped 0.1percent to USD3,411.
Comments