NEW YORK/LONDON: New York cocoa futures on ICE rallied on Monday, buoyed by the short-covering triggered by data showing speculators sharply increased their bearish stance, while the British pound's strength versus the dollar also supported prices.
Raw sugar and coffee were also bolstered by short-covering, after US government data surprised traders and showed that speculators aggressively raised their bearish bets in the sweetener, while they took their net short position in arabica to a record in the week to Dec. 12.
COCOA
March New York cocoa settled up $45, or 2.4 percent, at $1,922 per tonne.
"The catalyst really seems to be the spec short position," one US trader said.
Speculators increased their net short position by 13 times, taking it to 16,028 contracts as prices fell to 3-1/2-year lows, indicating that the market may be close to finding a bottom, traders said.
March London cocoa settled up 13 pounds, or 0.9 percent, at 1,420 pounds per tonne.
SUGAR
March raw sugar settled up 0.1 cent, or 0.7 percent, at 13.76 cents per lb.
The market was also lifted by short-covering, dealers said, after data showed speculators had switched to a large net short position in the week to Dec. 12.
"The COT (commitments of traders) report has ... raised further questions as to how much additional spec selling can really be expected, or at least at the sort of pace seen in the last week or so," Agrilion Commodity Advisers said in a market note.
"The weekly changes in positioning on many commodity markets (were) unprecedented this past week with sugar posting the single largest one-week net change in history," said James Cassidy, global head of Sugar Derivatives for Societe Generale, in a note late Friday.
March white sugar settled up $1.50, or 0.4 percent, at $362 per tonne.
COFFEE
March arabica coffee settled up 1.15 cent, or 1 percent, at $1.219 per lb.
Prices were also boosted by earlier strength in the Brazilian real, which makes it less attractive for producers to sell by dampening returns in local currency terms.
US green coffee stocks saw their biggest monthly drop in three years in November, Green Coffee Association data showed late Friday.
The US Department of Agriculture pegged global 2017/19 coffee output will slightly exceed record demand.
March robusta coffee settled up $3, or 0.2 percent, at $1,726 per tonne.
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