Cocoa futures on ICE rose to the highest in more than two months on Wednesday, supported by concern that the West African mid-crop could be significantly smaller than last year’s, while raw sugar prices extended gains to the highest in 2016 so far.
Coffee futures rose to multi-week highs.
Cocoa dealers said there remained considerable uncertainty over the crop outlook, with recent rains possibly providing some relief after prospects were damaged by an earlier prolonged spell of hot, dry weather.
May London cocoa settled up 29 pounds, or 1.3 percent, at 2,221 pounds a tonne, after touching 2,232, the highest since Jan. 4 for the second position.
“Today is a very positive day and maybe we could see a challenge towards 2,300 pounds but there is nothing out there that hasn’t been said before,” one cocoa dealer said.
Dealers said the rise gathered extra momentum when some stops were triggered on New York cocoa when May broke above $3,000 a tonne.
The contract settled up $52, or 1.8 percent, at $3,022 per tonne, after rising to $3,037, the highest on a continuation chart since Jan. 6.
Raw sugar futures initially extended gains to 14.94 cents per lb, the highest since Dec. 31, on what traders called a combination of supportive factors including chart-based buy signals and the firm Brazilian real. Prices turned lower after failing to reach key resistance at 15 cents a lb, an area where the market also stumbled last week.
May raw sugar settled down 0.23 cent, or 1.6 percent, at 14.63 cents per lb.
May white sugar settled down $3.40, or 0.8 percent, at $422.70 per tonne, after rising to $429.20, the highest since Jan. 25 for the spot contract.
Arabica coffee futures edged up to a one-month high as Rabobank forecast Brazil’s 2016/17 crop at 51.8 million bags, below market expectations, after conducting its own crop survey and seeing the drought’s impact on robusta.
“The low robusta estimate is due to a very severe drought in Espírito Santo and irrigation restrictions, together with a severe cochonilha da roseta (mealybug) infestation,” Rabobank said.
May arabica coffee settled up 0.65 cent, or 0.5 percent, at $1.2235 per lb after climbing to $1.229, the highest since Feb. 5.
May robusta coffee settled up $12, or 0.9 percent, at $1,420 per tonne.