New York cocoa rally stalls, arabica sets two-month low

• March New York cocoa was down $2, or 0.1pc, at $2,795 a tonne at 1150 GMT.
• The market remains underpinned by concerns about dry weather in top grower Ivory Coast.
• March arabica coffee was down 0.65 cents, or 0.6pc, at $1.1150 per lb after setting a two-month low of $1.1060.

LONDON: New York cocoa futures turned lower on Tuesday after testing but failing to breach resistance around last week's 20-month high, while arabica coffee slipped to a two-month low.

COCOA

March New York cocoa was down $2, or 0.1pc, at $2,795 a tonne at 1150 GMT, after testing resistance around last week's high of $2,808.

The market remains underpinned by concerns about dry weather in top grower Ivory Coast.

"The upswing is due to concerns about a lower mid-crop in Ivory Coast ... after the country experienced too little rainfall in recent weeks. Though there have been some patchy rain showers in the meantime, these have not been enough in many places to offset the moisture deficit," Commerzbank said in a market note.

Light showers in some of Ivory Coast's cocoa regions last week are likely to have boosted the April-to-September mid-crop, while heavier rain is needed elsewhere, farmers told Reuters on Monday.

March London cocoa was up 12 pounds, or 0.6pc, at 2,011 pounds a tonne.

COFFEE

March arabica coffee was down 0.65 cents, or 0.6pc, at $1.1150 per lb after setting a two-month low of $1.1060.

Dealers said rising ICE certified arabica stocks had helped to put the market on the defensive.

Speculators have also been liquidating long positions with technical signals also becoming more bearish.

March arabica coffee may test a support at $1.1040 per lb, a break below which could cause a fall to $1.0625, Reuters technical analyst Wang Tao said.

March robusta rose $15, or 1.15pc, to $1,320 a tonne.

SUGAR

March raw sugar was down 0.02 cent, or 0.1pc, at 14.43 cents per lb, as the market continued to hover just below last week's two-year high of 14.58 cents.

The market has been buoyed by tightening supplies with a global deficit widely forecast for the 2019/20 season while harvests in both India and Thailand have been delayed.

The upside, however, remained capped by the prospect that higher prices could encourage mills in Brazil to increase sugar production at the expense of ethanol.

March white sugar was down $1.90, or 0.5pc, at $399.60 a tonne.