LONDON: New York cocoa futures fell on Tuesday with the market back on the defensive after a short covering rally while London cocoa rose, supported by the weakness of sterling.
COCOA
May New York cocoa was down $27, or 1.2 percent, at $2,236 a tonne at 1500 GMT.
Dealers said a short covering rally, which saw prices climb from last week's seven-week low of $2,203 to a peak on Monday of $2,280, had run out of steam.
Crop conditions in Ivory Coast remained generally favourable while cocoa arrivals at ports in the world's top producer are also running ahead of last season's pace.
"The cocoa price is caught between high production and strong demand," Commerzbank said in a market note.
"In view of the surprisingly high level of deliveries, we are no longer as optimistic about price developments as we were last autumn."
May London cocoa was up 7 pounds, or 0.4 percent, at 1,646 pounds a tonne buoyed by the weakness of sterling.
The British pound accelerated its losses against the dollar and the euro on Tuesday on the back of renewed selling pressure after the currency fell below a key market level following weak data.
SUGAR
March raw sugar was down 0.05 cent, or 0.4 percent, at 12.80 cents a lb.
Dealers said the market remained within its recent trading band despite a sharp run-up on Monday with potential exports from India hanging over the market.
They noted a major conference in Dubai later this month could add to an increasingly bearish mood on fundamentals.
"It seems unlikely there will be a sustained (upside) breakout with the sugar conference coming up," Tom Kujawa, co-head of the softs department at Sucden Financial said.
The discount for the front month March, however, has been largely erased, indicating that short-term supplies might be tighter than previously believed.
"The market seems to have kicked the surplus can out of the first quarter of 2019," Commonwealth Bank of Australia analyst Tobin Gorey said.
March white sugar was unchanged at $340 per tonne.
COFFEE
March robusta coffee was down $3, or 0.2 percent, at $1,553 a tonne as trade in the physical market was slowed by the Tet Lunar New Year holiday in top robusta producer Vietnam.
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