LONDON: New York cocoa futures climbed to a six-month peak on Wednesday, supported partly by sentiment that global production this season may be lower than previously anticipated.
COCOA
December New York cocoa rose $9 or 0.4 percent, to $2,091 a tonne by 1117 GMT after touching $2,095, the highest for the front month since April 6.
Support came from indications that an anticipated global surplus in the 2017/18 season may be smaller than previously expected, partly reflecting lower projections for production in Dominican Republic following recent hurricanes.
Dealers said weak prices in recent months may also curb global production.
Indonesian cocoa production is likely to drop over 10 percent in the year to September 2018, with farmers reducing the size of plantations following a deep slide in prices, a leading trader told Reuters.
"People are reducing their surplus (for 2017/18) to around 50,000 tonnes," one dealer said, but warned there remained significant uncertainty about the outlook with the cocoa season only starting a few days ago.
A Reuters poll in late July produced a consensus of a global surplus of 100,000 tonnes in 2017/18.
Dealers said speculators had begun to cover a net short position with buying also triggered by a more supportive technical backdrop following the recent rise above the 200-day moving average for the first time in more than one year.
December London cocoa rose 11 pounds, or 0.7 percent, to 1,565 pounds a tonne.
COFFEE
December arabica coffee was up 0.6 cent, or 0.5 percent, at $1.2605 per lb.
Dealers said prices were hovering just above Monday's 2-1/2 month low of $1.2530 as rains in Brazil improve the crop outlook in the world's top grower.
Recent rains over much of central Brazil should help spur flowering in coffee trees, which is key to gauging production potential for next year, but more precipitation is needed to improve soil moisture, analysts said on Tuesday.
"The rain plays an important role in the flowering of the coffee trees, which determines the production potential for the upcoming 2018/19 crop," Commerzbank said in a market note.
"That said, further rainfall will be needed to support the trees in their continued development. So far the chances of this seem good," the bank added.
November robusta coffee was up $6 or 0.3 percent, at $2,027 a tonne.
SUGAR
March raw sugar was up 0.12 cent, or 0.85 percent, at 14.16 cents per lb, boosted partly by a softer dollar.
December white sugar rose $6.80 or 1.9 percent, to $372.30 a tonne.
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