Cocoa slips

Cocoa futures slid on Friday, trimming gains following the short-covering rally earlier in the week, under pressure from origin hedging with both Ivory Coast and Ghana selling forward, said dealers. Coffee inched higher in choppy trade, as dealers eyed the narrowing premium on front-month robustas, while sugar also turned up. Liffe cocoa futures traded over 2 percent lower, with dealers noting hedging pressure.
The softs markets trading on ICE Futures US will be shut for the Presidents Day holiday on Monday and will reopen for regular trade Tuesday, February 21. London May cocoa futures fell 41 pounds, or 2.7 percent, to settle at 1,502 pounds a tonne, while benchmark ICE May futures dropped $60 or 2.5 percent, to end at $2,345 a tonne.
"Ghana are big sellers, they have been for the past three or four days," said a London-based broker. One veteran cocoa dealer in New York noted that Ghana, the world's second-biggest producer, sold at a significant discount to last year's average price. A group of Ivorian cocoa exporters including majors such as Armajaro and Noble said on Thursday they would begin participating in Ivorian cocoa auctions on February 17 after reaching a compromise with the government.
"It's looking like things are progressing. More people are using it. We had started out with small local based purchases testing the water," said a second London-based broker. Robusta coffee futures eased as dealers eyed the narrowing premium on the front-month contract, which fell to close at a $100 per tonne premium over May, compared with a premium of $129 per tonne at the close on Thursday.
One market participant has built up a long position in NYSE Liffe's March robusta coffee futures contract, which could equate to a delivery of a large chunk of the certified coffee available, and exceed proposed delivery limits due to be enforced by the exchange later in the year, traders said.
Benchmark May robusta coffee on Liffe dropped $45, or 2.2 percent, to close at $1,994 a tonne. Volume was light in arabica coffee futures on ICE, with dealers wary to take on risk ahead of the long weekend, especially as economic uncertainty remains in Greece, dealers said.
May arabica was choppy, and finished up 1.15 cents, or 0.6 percent, at $2.0235 per lb. The market took a breather after dropping for seven days straight and closing at a 15-month low on Thursday. March raw sugar futures on ICE dealt in a narrow range that lacked direction. The contract crept up 0.03 cent to settle at 24.62 cents per lb. London May white sugar futures fell 50 cents to close at $626.50 per tonne.