Cocoa futures ended at a 2-week high on Tuesday amid talk that a crop disease may have struck a leading producer of the commodity, while raw sugar rose and arabica coffee futures declined as business remained subdued by a holiday in Britain.
London financial markets are closed as the UK celebrates Queen Elizabeth's 60th year on the throne. The markets there reopen on Wednesday. Investors will continue to suffer from jangled nerves due to the euro zone debt crisis and the prospect of weak growth in the world's economic drivers - the United States and China.
"The global macro situation will keep investors a little skittish," said Sterling Smith, vice president of commodity research at Citibank's Institutional Client Group in Chicago. July cocoa on ICE Futures US rose $69, or 3.3 percent, to close at $2,163 per tonne, the highest spot settlement since May 22, Thomson Reuters data showed.
Smith said the market could have received a boost from talk that No 4 producer Nigeria may be suffering from cocoa canker. The disease destroys the pods where cocoa beans form and can seriously reduce production in affected countries. "This was enough to get cocoa turned around. That could tighten supplies a little bit," Smith said.
Traders said cocoa also ran into a short-covering spurt that hoisted spot July above $2,100. Raw sugar rose and arabica coffee declined in largely quiet business. The July raw sugar contract on ICE gained 0.16 cent to close at 19.06 cents per lb. Demand from Muslim countries booking orders before the holy fasting month of Ramadan next month buoyed the sweetener, traders said.
"Ramadan demand should keep us above 19 cents," one said. Arabica coffee declined late but held above the two-year low of $1.5465 per lb hit during the previous session. The July arabica coffee contract on ICE dropped 2.25 cents, or by 1.4 percent, to end at $1.562 per lb.
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