LONDON: Cocoa futures in both New York and London rose to 11-month highs on Wednesday boosted by technically-driven buying and a proposal that top producers Ivory Coast and Ghana impose a minimum price for bean sales.
COCOA
September New York cocoa was up $37, or 1.5pc, at $2,541 per tonne at 1355 GMT after climbing to a peak of $2,545, the highest for the second position since July 2018.
Dealers said most of the buying appeared to have been technically-driven although news that Ghana and Ivory Coast had suspended forward sales for the 2020/21 season and a minimum price of $2,600 had been proposed was supportive.
A stronger pound versus the dollar also gave New York cocoa some support and weighed on sterling-denominated London prices.
"We've been breaking through some recent highs so technically it is looking good," one dealer said.
"If the specs want to really get hold of it I think they can push it a bit more (on the upside)," one dealer said.
September London cocoa rose 11 pounds, or 0.6pc, to 1,860 pounds a tonne after rising to a peak of 1,866 pounds, also its highest since July 2018.
SUGAR
July raw sugar was down 0.02 cents, or 0.2pc, at 12.52 cents per lb after peaking at 12.55 cents, its highest level since April 25.
Dealers said producer selling above 12.50 cents had slowed the recent run-up but market fundamentals were becoming more constructive.
Supportive factors include dry weather in India and the recent climb in corn prices which could increase the use of cane to make ethanol and thereby curb sugar production.
Corn and cane are alternative feedstocks for the ethanol industry.
"The monsoon has come late to India and there are worries that it will underperform, which will damage this year and next year's sugar production," Marex Spectron analyst Robin Shaw said in a market update.
Shaw said, however, that sugar was unlikely to break out of its current range of 11.50 cents to 13.50 cents.
"If it does, at this early stage of the Brazil crop, it will simply induce mills to switch from minimum sugar to maximum sugar and create 5-6 million more tons of unneeded supply," he said, referring to the ability of mills to alter the proportion of cane used to make either sugar or ethanol.
August white sugar was down $2.50, or 0.7pc, at $333.30 per tonne.
COFFEE
July arabica coffee rose 0.65 cents, or 0.7pc, to 97.65 cents per lb.
Dealers said the market had finally began to find some support after touching a two-week low of 96.75 cents earlier in the session.
July robusta coffee rose $3, or 0.2pc, to $1,391 per tonne.
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