Cocoa largely erases previous day's gains; sugar, coffee also fall
NEW YORK/LONDON: New York cocoa futures on ICE fell on Thursday, largely erasing the previous session's gains as a short-covering rally ran out of steam, while sugar and coffee also fell.
The moves tracked broader weakness in commodity markets, as the 19-commodity Thomson Reuters Core Commodity Index touched its weakest levels in over a week.
COCOA
* May New York cocoa settled down $26, or 1.1 percent, at $2,254 per tonne, largely erasing gains made the previous session, when the contract touched a one-week high.
* The market was back on the defensive after a short-covering rally since the start of the month ran out of steam, dealers said.
* Total open interest fell over the course of that rally to reach 244,865 lots on Wednesday, its lowest level in over a month, ICE data showed.
* The market has been weighed by plentiful supplies out of West Africa.
* Cocoa arrivals at ports in second-largest producer Ghana reached 618,520 tonnes between the start of this year's harvest on Oct. 1 and Jan. 24, up 11 percent year-on-year, data from the marketing board showed.
* May London cocoa settled down 17 pounds, or 1 percent, at 1,670 pounds per tonne.
SUGAR
* March raw sugar settled down 0.17 cent, or 1.3 percent, at 12.73 cents per lb, erasing Wednesday's gains.
* Prices were pressured by weakness in oil markets. Lower oil prices can diminish the competitiveness of cane-derived ethanol in Brazil, raising the possibility of mills increasing the amount of cane used to make sugar.
* Still, prices continued to be range-bound. And that is likely to continue until the start of the Dubai Sugar Conference on Sunday, wrote James Liddiard, senior vice president of consultancy Agrilion, in a note.
* Longer-term, dealers were tracking potentially supportive factors.
* "Even though sugar prices improved since October, they remain unattractive so that beet and cane areas will retreat in exporting countries," Paris-based trade house Sucden said in a market report.
* "Overall, production-consumption balance points toward neutrality in 18/19 or even deficit in 19/20," it added.
* March white sugar settled down $3.70, or 1.1 percent, at $337.70 per tonne.
COFFEE
* March arabica coffee settled down 1.2 cent, or 1.1 percent, at $1.043 per lb.
* Prices have been pressured by the diminishing threat of dry weather in top grower Brazil, dealers said.
* March robusta coffee settled down $9, or 0.6 percent, at $1,547 per tonne.