New York cocoa futures rose to a 16-month high on Friday, extending this week's strong advance, while raw sugar was hovering just above an eight-month low set earlier this week. May New York cocoa was up $17, or 0.7 percent, at $2,510 a tonne at 1447 GMT after rising to a peak of $2,524, the highest for the second position since November 2016.
Dealers said the recent run-up has been fuelled by technically-driven fund buying and a diminished outlook for production in Ivory Coast. They noted, however, the market now appeared heavily overbought, raising the prospect there could be a short-term setback in prices.
"From a technical perspective the market is still considered the most overbought in the past ten years," INTL FCStone said in a market update. May London cocoa was up 7 pounds, or 0.4 percent, at 1,780 pounds a tonne after touching a peak of 1,790 pounds, the highest for the second position since January 2017.
Ivory Coast's Coffee and Cocoa Council (CCC) will suspend programmes for the 2018-19 season that boost cocoa output, it said on Friday, aiming to reduce production in the face of global oversupply. May raw sugar was off 0.01 cent, or 0.1 percent, at 12.88 cents per lb, hovering above Wednesday's low of 12.76 cents, the weakest for the front month since June 2017.
Dealers said the market may be set for a second session of consolidation on Friday after falling sharply earlier in the week after a higher forecast for production in India added to concerns about excess supplies. They noted weekly position data to be issued later on Friday should show speculators largely maintaining their net short position in the week to March 6.
"Should we close below 13 cents tonight it will be the worst close on the weekly chart for roughly two years and perhaps a vindication of the spec community's position," said Thomas Kujawa, co-head of the softs department at Sucden Financial in a market update. May white sugar was unchanged at $356.70 per tonne.
The US Department of Agriculture (USDA) raised its forecast for domestic sugar supply as it increased expectations for a record crop and upped its forecast for imports from Mexico, the country's top foreign supplier. May arabica coffee was up 0.65 cent, or 0.5 percent, at $1.2095 per lb. May robusta coffee rose $23, or 1.3 percent, to $1,783 a tonne.
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