Cocoa slips

Cocoa futures fell along with much of the commodity complex on Friday, as lower-than-expected growth in grindings in North America fuelled some demand concerns, while robusta coffee jumped to a five-week high on short-covering. Sugar futures closed at their highest in roughly two months on short-covering as investors eyed news of progress on Greece's debt.
The arabica coffee market finished lower after choppy in indecisive dealings. "Agricultural markets have been very responsive to any information regarding the evolution of the global economic outlook," said Lysu Paez Cortez, commodities analyst at Natixis.
Cocoa futures on ICE eased with March dropping $61, or 2.6 percent, to close at $2,259 a tonne. The contract remained in a range after retesting the bottom around $2,000 earlier this month and bouncing higher. "The global economic situation is likely to have a negative impact on consumption," Natixis' Paez Cortez said. North American cocoa grindings in the fourth quarter rose 1.49 percent from the fourth quarter 2010, to 118,926 tonnes, coming in below expectations as the number of participating plants went down.
This followed Europe's fourth-quarter cocoa grind which climbed 1.8 percent from the fourth-quarter 2010, lower than the 4-7 percent expected. London March cocoa settled down 48 pounds, or 3.1 percent, at 1,489 pounds per tonne. Dry weather in top producer Ivory Coast helped to limit the downside with the country expected to see a fall in production on the year due to less favourable weather.
Major cocoa industry players have already cut forecasts for this year's main crop, the October-March period which produces the bulk of annual output, to around one million tonnes from the 1.2 million to 1.3 million tonnes estimated for last year. March robusta coffee on Liffe jumped $54, or 2.9 percent, to close at $1,932 a tonne, the highest settlement in five weeks.
"We may be seeing a little bit of short covering as the funds are short of the market," said a London-based broker. Arabica coffee prices were choppy as the market remained well within the range of $2.11-$2.40 per lb that the spot contract has been stuck in for nearly three months. Benchmark March arabica coffee futures on ICE dropped 1.25 cents, or 0.6 percent, to end at $2.2540 per lb.
Dealers said that Colombia's main crop, which was harvested from September 2011, was below expectations as a tree renovation program and unfavourable weather hit output in the world's biggest producer of washed arabica beans. "Looking to 2012/13, the flowering of the main crop will occur from next month up until April, but they are in desperate need of dry weather for the development of the crop," said Stefan Uhlenbrock, analyst at F.O. Licht.
Meanwhile raw sugar futures eased from a two-month high, as uncertainty over Brazil's coming crop size and concerns of a delay to the harvest underpinned prices. March raw sugar futures on ICE inched up 0.28 cent, or 1.1 percent, to close at 24.89 cents a lb. Sugar and ethanol consultant Job Economia said on Thursday that Brazil's 2012/13 centre-south cane output should rise to between 540 million and 560 million tonnes, while Macquarie Bank put the 2012/13 crop in the main centre-south cane belt at 520 million tonnes. London March white sugar futures closed up $4, or 0.6 percent, at $645.60 per tonne, the highest since November 10.