Cocoa futures fall

Cocoa futures on ICE fell on Tuesday, in seesaw dealings as prices consolidated above a recent 10-month low and shrugged off concerns about potential crop losses in West Africa linked to dry Harmattan winds. Raw sugar turned lower and coffee futures eased as top growers Brazil and Vietnam celebrated holidays.
May New York cocoa settled down $11, or 0.4 percent, at $2,859 per tonne, after trading as low as $2,797, with March/May spreading boosting volume. The contract has moved in wide ranges nearly every day since bouncing up from a 10-month low on January 28, changing direction every other day. Ghana could lose as much as 25 percent of its projected cocoa output this season as harsh winds and a lack of rain confound efforts to boost yields in the world's second-largest producer, a government source said.
"We had this last week. Tuesday was down, Wednesday was up, Thursday was down, Friday was up. It just seems each day it doesn't follow through and people lose confidence in following the trend," one cocoa dealer said. March London cocoa settled down 21 pounds, or 1 percent, at 2,037 pounds per tonne. Raw sugar futures were slightly lower as ICE March settled down 0.06 cent, or 0.5 percent, at 13.39 cents per lb, with weakness in global stock markets encouraging speculators to further scale back their net long position.
Dealers said an initial advance had run into resistance just above Monday's peak of 13.53 cents a lb with the market looking likely to consolidate around current levels in the short-term after steadily rising above the February 2 four-month low. "The falling world stock markets are making the headlines as fears of an impending global recession are coming to the fore and investors turn risk-off," said Tom Kujawa, co-ahead of the softs department at Sucden Financial.
"It would seem, then, we are more likely to see the remaining net spec length continue to sell into rallies in the short term." May white sugar settled up $1.60, or 0.4 percent, at $392.50 per tonne. Dealers said Friday's expiry of the March whites contract is in focus this week, with open interest on Tuesday down 4,771 lots at 14,949 lots, lessening the likelihood of a large delivery. ICE March arabica coffee settled down 1 cent, or 0.9 percent, at $1.1475 per lb. March robusta coffee settled up $1, or 0.1 percent, at $1,387 per tonne.