US cocoa rebounds

US cocoa futures rebounded strongly after dipping to a one-year low on Monday, with sugar and coffee up as well after a selling spree last week hit commodities and other financial markets. Global equities rose with investors sceptical that fresh efforts by policymakers would be enough to stem Europe's crippling debt crisis.
New York's December cocoa contract rose $44 to finish at $2,678 per tonne, after touching a fresh one-year spot contract low at $2,610 during the session. London's December cocoa futures hit a contract low at 1,721 pounds a tonne before closing up 13 pounds at 1,747 pounds per tonne.
"Cocoa is experiencing a little bit of a recovery," said Country Hedging Inc senior analyst Sterling Smith. He added the fall in values likely spurred commercial buying of beans. On Monday, cocoa trader Olam International said it estimated the 2010/11 surplus at close to 450,000 tonnes. The market was not yet pricing in a surplus of this size, the company's chief executive said. The December cocoa futures in New York has fallen roughly $500 per tonne this month so far, dropping the market into technically oversold territory and making it ripe for a bounce. Fundamentally, however, the market is still deemed bearish due to ample global supplies.
"Estimates for Ivory Coast production (based on port arrival figures) are getting close to 1.5 million tonnes. It's certainly going to be a new record," a European commodities fund analyst said. "If you factor in the 200,000 tonnes being smuggled out of Ghana and Togo, then we're talking an Ivorian crop of 1.7 million tonnes."
Cocoa arrivals at ports in top grower Ivory Coast had reached 1,412,845 tonnes by September 4 since the start of the season in October, up from 1,148,251 tonnes in the same period a year ago, according to data from Bourse du Cafe et Cacao (BCC) obtained by Reuters on Monday. Coffee futures surged as roaster and commercial buying boosted arabica values.
"I think after the generalised slaughter last week, I think we've overdone arabica coffee selling a little bit," said Smith. December arabica coffee futures on ICE gained 4.50 cents or almost 2 percent to finish at $2.3595 per lb. London's November robusta coffee added $3 to close at $1,954 per tonne.
Sugar futures firmed although the weak technical outlook for raws meant a test of the area around 21.50 cents, basis the key March contract, was likely in the coming sessions. ICE March raw sugar contract increased 0.15 cent to close at 24.28 cents per lb. The contract has lost about 15 percent of its value since the end of August.
December white sugar futures on Liffe rose $2.50 to end at $634 a tonne. "The sugar market is seeing a tentative recovery because of a better macroeconomic backdrop," said James Kirkup, head of sugar brokerage at ABN Amro Markets (UK) Ltd. Dealers noted a pick-up in physical demand as buyers took advantage of last week's fall in prices. Egypt's state-owned Sugar and Integrated Industries Company said it bought 50,000 tonnes of Brazilian sugar in a tender. Egypt's Delta Sugar said it had bought 35,000 tonnes of Brazilian sugar from Bunge.