London cocoa, coffee weaken

London cocoa futures dipped on Monday on profit-taking from Friday's 22-year high while a stronger dollar contributed to a modest setback in both coffee and raw sugar. "We're seeing profit-taking. The market was slightly exaggerated (to the upside) and we've got people tidying up positions between now and the end of the year," one London cocoa futures trader said.
London cocoa futures appeared well-supported and could test fresh 22-year highs later although the market appears overbought for now, dealers said. London May cocoa settled down 10 pounds at 1,752 pounds a tonne while ICE March cocoa was down $33 at $2,562 per tonne. The rise has been driven partly by diminishing crop prospects in the key producing region, West Africa, and Fortis on Monday projected a third successive global cocoa deficit in 2008/09.
The investment bank had previously projected a small surplus in 2008/09 and the revision reflected a lower estimate for African production. "There is the strong prospect that the 2008/09 season in West Africa will be poorer than expected earlier in the year, and that we shall see the third successive season of a global net deficit," Fortis said. The latest port arrival figures from top producer Ivory Coast also reinforced concern about crop prospects.
Cocoa arrivals at ports in No 1 grower Ivory Coast reached 396,000 tonnes from October 1 to December 21, steeply down from 721,413 tonnes in the same period of the previous season, exporters estimated on Monday. Coffee prices were lower, tracking losses in many other commodity markets as the dollar strengthened. ICE March arabicas was down 2.25 cents or 2.0 percent to $1.0870 per lb at 1745 GMT.
Robusta coffee futures in London also eased with arbitrage and light hedging from Vietnam, the world's top robusta coffee producer, weighing on the market. "We're seeing more arbitrage as the New York market has come off a lot. There is also origin (selling) around," one London robusta coffee dealer said.
Another robusta coffee dealer said, "There is some hedging from Vietnam on the March contract." London March robustas ended down $28 at $1,603 per tonne. Raw sugar futures on ICE also eased with March off 0.08 cents at 10.87 cents a lb. Dealers and analysts, however, saw a tightening global supply helping to underpin prices in the medium term.
Global sugar prices are seen between 9 and 12 cents per lb over the next 10-18 months, as the departure of funds from the market offsets lower output, the executive director of the International Sugar Organisation said. March white sugar in London settled up $1.20 at $308.30 per tonne.