Cocoa prices closed weak Wednesday in a modest setback after the market surged to its highest levels in more than 20 years this week, but the overall mood remained bullish, dealers said. Coffee edged up to 3-1/2-month highs and sugar rose to four-month peaks on follow-through support from Tuesday's sharp rise.
"All these (tropical products) have decent demand that will keep the market supported," Jack Scoville, vice president of brokers the Price Group in Chicago, said when asked about the performance of soft commodities.
September cocoa in London closed down 23 pounds at 1,721 pounds a tonne. The contract set a new peak of 1,748 pounds on Tuesday, the highest level for the benchmark second month in more than 22 years. Cocoa prices have risen about 60 percent since the start of the year. Sugar moved higher to close at four-month highs, with moves linked to the surging crude oil market.
August white sugar in London rose $3.30 to finish at $396.50 per tonne, after hitting a double top with Tuesday's high at $398.00. The settlement marks the highest since March 3 on a spot-month basis. "Sugar goes through periods where it decouples from the oil market and the corn market. We seem to have got reengaged," brokers Sucden UK said in a daily market report.
September robustas rose $5 to end at $2,534, the highest close for the benchmark second month since March 14. "Coffee seems to have got caught up with everything else as record oil prices drive demand for commodities as a hedge against inflation," Phull said.
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