Cocoa futures on ICE fell to their lowest in about seven weeks on Wednesday on a bountiful supply outlook and technically driven selling, and raw sugar prices also eased. March New York cocoa settled down $39, or 1.8 percent, at $2,176 per tonne after touching $2,163, the lowest since mid-December.
Supplies remain ample and the mid-crop in top grower Ivory Coast was developing well, dealers said. The contract was hovering near support around the $2,165 to $2,170 levels, which represents a 78.6 percent Fibonacci retracement of the early December lows and late December highs, said Boyd Cruel, senior market strategist at High Ridge Futures.
Technical indicators had become more bearish after the market's recent slide, dealers said. May London cocoa settled down 10 pounds, or 0.6 percent, at 1,597 pounds per tonne after dipping to 1,589 pounds, the weakest for the second position since Dec. 12.
"Robust support stands at 1,580 (pounds a tonne) and a break of this level could pave the way for further losses back to 1,500 in the longer term," Sucden Financial technical analyst Geordie Wilkes said in a market note. Ivory Coast's cocoa marketing board granted an export license to the company that bought the assets of SAF-Cacao, a top exporter until it was liquidated in July, a document reviewed by Reuters shows.
March raw sugar settled down 0.16 cent, or 1.3 percent, at 12.53 cents per lb. Prices were somewhat range-bound and pressured by the upcoming harvest in top grower Brazil, dealers said. "We're getting ready for the next Brazilian crop," said Shawn Hackett, president of Hackett Financial Advisors in Boca Raton, Florida. "It's hard to see why the market would gain traction with fresh supplies coming."
Dealers awaited further clarity on the extent to which fund buying fuelled a run-up in prices earlier this month, with Commitments of Traders reports to resume on a staggered schedule on Friday. March white sugar settled down $3.30, or 1 percent, at $339.30 per tonne.
March arabica coffee settled down 0.5 cent, or 0.5 percent, at $1.021 per lb. "The dollar area, plus or minus 2 cents, has been rock-solid support for a long time ... We don't see any basis for the market to break down below that," Hackett said. Dealers continued to watch the weather in top grower Brazil with concerns persisting about dryness despite recent rains. March robusta coffee settled down $10, or 0.7 percent, at $1,527 per tonne.