New York cocoa futures on ICE fell to the lowest since 2013 on Friday, while the London market dropped to a 1-1/2-year low as funds increased their short positions amid expectations for ample global supplies, dealers said. Raw sugar futures sank to a four-month low after falling below their 200-day moving average for the first time since February as funds focus on the prospect of a rebound in global production in the 2017/18 season. Coffee prices turned higher after tapping multi-month lows.
New York March cocoa settled down $11, or 0.5 percent, at $2,395 per tonne, after touching the lowest price since August 2013 at $2,342. On a weekly basis, the second-position contract fell for the ninth of the past 10 weeks. Total open interest has risen for the past nine sessions to a one-month high of 251,644 contracts on Thursday, exchange data showed.
Dealers said that funds were building short positions in cocoa, with both markets looking technically weak while a strong flow of main-crop cocoa out of Ivory Coast added to sentiment that there is likely to be a global surplus in 2016/17. "We are seeing fresh (fund) selling backed up by improving (more bearish) fundamentals," one dealer said.
March London cocoa settled down 27 pounds, or 1.4 percent, at 1,926 pounds per tonne, after falling to 1,912 pounds, the lowest since April 2015. December London cocoa slipped to a 25-pound discount to March, shifting to a discount for the first time, with dealers noting this could imply a lack of nearby demand. March raw sugar settled down 0.24 cent, or 1.2 percent, at 19.12 cents per lb, having slipped to of 18.88 cents, the weakest since August 4. The spot contract closed down for the eighth straight week.
"The main thing is funds are liquidating their long positions," said S&P Global analyst Claudiu Covrig. March white sugar settled down $5.90, or 1.1 percent, at $509.40 per tonne. "The reason for the recent sell-off clearly is the major liquidation of the non-index fund net long position, despite the index fund increase," said Michael Liddiard of Agrilion Commodity Advisers.
In coffee, March arabica settled up 0.9 cent, or 0.6 percent, at $1.458 per lb, turning higher after finding support at the 61.8 percent Fibonacci Retracement level. On a weekly basis, it closed down for the fourth straight week. March robusta settled up $74, or 3.7 percent, at $2,064 per tonne.
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