Markets

NY cocoa rallies $100 on heavy chart-based buy signals

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COCOA

September New York cocoa settled up $101, or 5.3 percent, at $2,013 per tonne, after soaring to $2,019, the highest level since June 19.

"I think it is a technical move. We went through yesterday's highs and there were a cluster of moving averages which got broken on the upside which added impetus to the move," one dealer said.

Another said a strong pound helped New York prices while the market also broke above a short-term trend line on a 60-minute chart, triggering a bull flag and technical buying.

Second-largest cocoa producer Ghana's possible lack of money to pay farmers could be supporting prices, said Price Futures Group analyst Jack Scoville.

Cocoa prices are expected to climb in the second half of this year as falling production in West Africa in the 2017-18 season contributes to a smaller global surplus, a Reuters poll of eight traders and analysts showed on Thursday.

September London cocoa settled up 59 pounds, or 3.9 percent, at 1,565 pounds per tonne.

COFFEE

September arabica coffee settled up 1.15 cent, or 0.9 percent, at $1.3595 per lb, right around the 100-day moving average.

Dealers said the advance in prices was fueled by the recent strength of top grower Brazil's currency, which makes global prices less attractive in local currency terms to growers.

The market has also been supported by concerns about berry borer beetle damage to crops in Brazil, which could tighten high-quality coffee supplies, according to a market note from Commerzbank.

September robusta coffee settled down $2, or 0.1 percent, at $2,141 per tonne after peaking at $2,157, the highest level since July 14.

SUGAR

October raw sugar settled up 0.2 cent, or 1.41 percent, at 14.43 cents per lb.

The market derived support from news that Brazil's planned fuel tax increase had been reinstated following an earlier suspension by a judge.

The tax changes could lead to more cane being used to produce ethanol rather than sugar.

Talk that India may consider allowing more duty-free sugar imports has also helped to support prices.

October white sugar settled up $3.8, or 1 percent, at $393 per tonne.

 

Copyright Reuters, 2017