Cocoa rebounds from four-week low, sugar tumbles

Cocoa futures turned higher on late-day buying on the last day of the month on Wednesday, after speculative and chart-based selling pushed prices to four-week lows against the backdrop of an improving outlook for production in top grower Ivory Coast. Raw sugar futures sank more than 2 percent, briefly dipping below the psychologically important 20-cent level after breaking through support levels.
December London cocoa settled up 2 pounds, or 0.09 percent, at 2,308 pounds per tonne, after dipping to a low of 2,287 pounds, its weakest level since August 3. "There is technical selling but also people mentioning the Ivorian crop is looking potentially better, with rains falling at the right times in the right places during the past few days," one dealer said.
Dealers said volumes in London were boosted by September options expiry at 1100 GMT with September futures converging toward the 2,350 pounds strike price in the last few minutes of trading.
December New York cocoa settled up $8, or 0.3 percent, at $2,898 per tonne. It made a monthly gain for the first time since April. The International Cocoa Organisation raised its 2015/16 global cocoa deficit forecast to 212,000 tonnes, but traders said this was already worked into the market. October raws settled down 0.46 cent, or 2.2 percent, at 20.06 cents per lb.
"It has been a slightly disappointing one for the bulls with October NY having broken through initial support at 20.32 (cents) and 20.20, with the later re-enforced by the 20-day moving average, 20.18," Agrilion Commodity Advisers said in a note. "Psychologically and technically, 20 cents remains an important level for the bulls to hold on a settlement basis." Dealers said ample short-term supplies and sluggish physical off take continued to keep a lid on prices.
October white sugar settled down $8.40, or 1.6 percent, at $529.10 per tonne. Arabica coffee futures edged up with some concerns that recent rains might curb the potential of next year's crop in Brazil due to early flowering. "It is true that some of this wave of flowering may be lost if it does not rain in the next two or three weeks," Rabobank said in a report, adding that June rains mean there is plenty of soil moisture. December arabica futures settled up 1 cent, or 0.7 percent, at $1.4705 per lb, but posted their first monthly loss in four. September robusta coffee settled up $12, or 0.7 percent, at $1,828 per tonne.