NEW YORK/LONDON: Cocoa futures on ICE rallied more than 2 percent on Tuesday after government sources in Ghana revised down their crop estimate, while raw sugar jumped late in the session as perceptions about the record May delivery turned bullish.
Arabica coffee futures nudged higher, rising for the first time in four sessions.
Senior government sources in Ghana, the world's second biggest cocoa grower, said the country's 2014/15 cocoa output will be no more than 700,000 tonnes, down from the previous estimate of 850,000 tonnes.
July New York cocoa settled up $68, or 2.4 percent, at $2,943 per tonne. London July cocoa ended up 35 pounds, or 1.8 percent, at 2,022 pounds per tonne, after rising to 2,028 pounds, the highest for the second position since March 9.
The sources also said Ghana cocoa industry regulator Cocobod purchased 559,169 tonnes in the first 28 weeks of the season, down sharply from a year earlier.
"The market is up because Ghana purchases are down and the crop is worse than expected," a senior London-based broker said.
This prompted buying by speculators, traders said, noting that several in the cocoa industry had already lowered their own private estimates to between 725,000 tonnes and 750,000 tonnes, with some even expecting less than 700,000 tonnes.
"I don't think it's big (news) for supply and demand, but I think the specs see the headlines," one veteran cocoa trader.
While traders said the news from Ghana was the catalyst for the rally, technical strength also fueled the fire as New York prices held above the 100-day moving average.
Raw sugar futures jumped in late-day dealings on talk that vessels have been nominated for a large amount of the record May sugar delivery, a bullish move that buoyed the export differential in top-grower Brazil, one broker said.
July raw sugar futures settled up 0.24 cent, or 1.9 percent, at 12.75 cents a lb.
August white sugar futures closed down $1.30, or 0.3 percent, at $372.10 a tonne.
Arabica coffee futures were little changed, finding some support from the firmer real.
July arabica closed up 0.75 cent, or 0.6 percent, at $1.3365 per lb, while July robusta coffee finished up $6, or 0.3 percent, at $1,778 a tonne.
Comments
Comments are closed.