New York cocoa rallies

New York cocoa futures on ICE flirted with an eight-month high on Wednesday, buoyed by the sharply higher British sterling, while heavy July/September spreading by index funds pushed the discount to a contract low. Raw sugar inched lower in heavy spread-related dealings, remaining well within a two-week trading range as abundant global supplies continued to pressure the market. Arabica coffee turned lower after inching up to a three-week high.
New York cocoa futures rallied nearly 2 percent to $3,159 per tonne early in the session, just $8 shy of May's peak, which was the highest since October 2014. The British pound rallied as much as 1.1 percent against the dollar to a three-week high. New York September cocoa settled up $25, or 0.8 percent, at $3,135 per tonne. The July/September spread fell to a $9 discount, the biggest for the contract and a steep drop from the $17 premium held just two weeks prior. It fell to a $3 discount on Tuesday. "The specs are long so they had to roll out of July," said one US cocoa broker, adding that those who are short the contract are patient scale-down buyers. "There's not a lot of huge demand in the market."
July London cocoa closed down 1 pound, or 0.05 percent, at 2,096 pounds a tonne, pressured by the rallying sterling. Raw sugar futures edged lower. Commodities house Sucden, in its latest quarterly report, noted prospects for ample sugar supplies. "Sugar output in Thailand and India surprised on the upside and forthcoming crops look to be strong again," it said. "China's imports are constrained and Brazil can still produce enough sugar thanks to plentiful sugarcane. Simply put, the prospects of a surplus in 2015 remain unshaken."
July raw sugar on ICE closed down 0.06 cent, or 0.5 percent, at 12.01 cents a lb. Total volume exceeded 232,000 lots, more than double the average, as index funds rolled out of the July contract into October. August white sugar ended up 10 cents, or 0.03 percent, at $349.50 per tonne. July arabica finished down 0.9 cent, or 0.7 percent, at $1.3645 per lb, after initially rising to the highest since May 20 at $1.3885. July robusta ended up $6, or 0.3 percent, at $1,740 a tonne.