London cocoa futures on ICE fell for the ninth straight session on Monday, reaching a 22-month low and extending further into technically oversold levels on chart-based sell signals and pressure from earlier strength in the British pound. New York cocoa futures eased, but held above Friday's lowest level since August 2013, while sugar and arabica coffee prices also dropped.
March London cocoa settled down 31 pounds, or 1.6 percent, at 1,895 pounds per tonne, after falling to 1,879 pounds a tonne, a level last seen in February 2015. It was pressured by the British pound, which rose against the US dollar from the level it held when the London cocoa market closed on Friday, one US trader said. This brought the second-position London cocoa contract to around 18 on the 14-day relative strength index, its most oversold level in five years.
"The Commitment of Trader reports are still showing fund selling so, lower lows make lower lows," the trader said, adding that this spurred technical selling as well. Cocoa exports from Indonesian island Sulawesi more than doubled in November from a year ago, while weekly port arrivals in top grower Ivory Coast picked up pace, adding to the market's bearish tone.
New York March cocoa futures settled down $28, or 1.2 percent, at $2,367 per tonne, near Friday's trough of $2,342, the lowest since August 2013. Cocoa traders will watch the hotly contested elections in Ghana on December 7 for any impact on exports from the world's second largest producer. Citi Research forecast in its outlook report that cocoa prices to continue to sell off in 2017.
In sugar, March raws settled down 0.18 cent, or 0.9 percent, at 18.94 cents per lb. The contract fell as low as 18.89 cent, just one tick above Friday's low of 18.88 cents, the weakest since August 4. "The sugar bulls need to see the 19 cent support hold in the short term," said Tom Kujawa of Sucden in a report. "A close below 19 cents could result in a correction to 18 cents."
March white sugar settled down $2.80, or 0.6 percent, at $506.60 per tonne, hovering above Friday's six-month low on Friday. In coffee, March arabica settled down 1.3 cent, or 0.9 percent, at $1.445 per lb, extending losses after closing down for the fourth straight week last week. January robusta ended flat at $2,064 per tonne.