Cocoa prices weaken on lower North America fourth quarter grind

Cocoa futures were lower on Friday, weighed by a lower than expected fourth-quarter North American grind. Sugar edged up in a modest rebound from the prior session's sell-off.
March New York cocoa was off $30 or 1.4 percent at $2,134 a tonne at 1532 GMT, heading down towards a 3-1/2 year low of $2,106 set on January 11.
North American cocoa grindings fell below expectations to a 4-1/2 year low in the fourth quarter of 2016, data from the National Confectioners Association (NCA) showed on Thursday.
Cocoa processors in the United States, Canada and Mexico reported grinding 117,588 tonnes of beans in the period from October to December, down 1.1 percent from the same period a year earlier, NCA data showed.
"If you put it together with the Asia grind it wasn't that disappointing. It might been that people were grinding more in Asia and bringing it to the US," said Matt Goettler, a trader with Rotterdam-based Cocoanect, adding the combined grind in Asia and North America had risen by about nine percent.
Cocoa processing in Malaysia, Singapore and Indonesia increased 16.9 percent in the fourth quarter from a year earlier to 188,493 tonnes, data from the Cocoa Association of Asia (CAA) showed on Thursday.
March cocoa in London was down 14 pounds or 0.8 percent at 1,744 pounds a tonne.
Raw sugar futures regained some ground after falling sharply on Thursday.
Dealers noted the front month's premium had been erased during the sharp setback with little sign yet of expected supply tightness this quarter.
"The signal is that there must now be a good chance that the prospective modest residual tightness in this quarter's sugar balances has been resolved," said analyst Tobin Gorey of Commonwealth Bank of Australia in a market note.
One dealer said funds may have scaled back long positions on Thursday after the market fell below the 100-day moving average. "Because of the (heavy) volume that went through, it's a clear indication that the funds were behind that," one dealer said, referring to the sharp sell-off on Thursday.
March raw sugar was up 0.08 cents or 0.4 percent at 20.26 cents a lb. Prices fell sharply on Thursday dipping to a two-week low of 20.05 cents.
March white sugar was up $1.00, or 0.2 percent, at $531.70.
Arabica coffee futures were higher with March up 1.70 cents or 1.1 percent at $1.5245 per lb as the market remained underpinned by the prospect of a smaller crop in Brazil this year, an off-year in its biennial crop cycle.
March robusta coffee was off $7 or 0.3 percent at $2.254 a tonne.