Cocoa down on Ivorian oversupply, raw sugar at seven-week low

Cocoa futures eased on Friday, pressured by enduring worries about oversupply in top grower Ivory Coast, while raw sugar fell to its weakest in nearly two months on weak technicals. May New York cocoa was down $21, or 1 percent, at $2,005 a tonne by 1519 GMT, while May London cocoa fell 14 pounds, or 0.9 percent, to 1,616 pounds a tonne.
The market found reprieve in the previous session, gaining on short-covering after the Ivory Coast signalled it may have resold most of the cocoa behind a supply glut. However, the lift was short-lived, with dealers noting the large number of spot sales was not entirely surprising since the main crop is close to wrapping up.
"I think the more pressing matter is what they do with the mid-crop," said one dealer. "The mid-crop is looking good. And they've obviously got a decision to make on farmer pricing for the mid-crop coming up. There are a few issues to sort out."The London market was further weighed by a firmer pound, which was on course for its strongest week in a month.
May raw sugar was down 0.23 cents, or 1.1 percent, at 19.90 cents per lb, having slipped to its weakest since January 3 earlier in the session. The market was dragged down by weak technicals, falling below the 200-day moving average and then failing to hold above the 20 cents level. The February 28 expiry of the front month contract was also in focus, with INTL FCStone noting deliveries from Mexico, Guatemala and El Salvador were expected, as well as smaller volumes from northern Brazil.
"The contract expires on Tuesday and we expect a sudden downward shift in market sentiment could widen the spectrum of deliverers at the tape, and the volume at which they deliver," said sugar analyst Darren Stetzel. May white sugar fell $4.20, or 0.77 percent, to $544.40 a tonne. May arabica was down 2.60 cents, or 1.7 percent, at $1.4735 per lb. Dealers said prices were pressured by the May contract struggling to hold above key resistance at $1.50. One dealer said that volumes were low in the absence of fresh fundamental news, amplifying the sharp downturn. Robusta coffee eased further, with the May contract down $17, or 0.8 percent, at $2,138 a tonne.