Cocoa soars

ICE cocoa inched up in mixed trading on Friday after touching its highest level in more than four months during a rally driven by short-covering and underpinned by bullish technical factors and limited concern over West African supply prospects. Arabica coffee sank to a fresh almost three-year low in technically-driven dealings, and sugar hovered near recent lows.
July cocoa on ICE Futures US settled up $4, or 0.2 percent, at $2,364 a tonne, having earlier touched $2,375, the highest level since December. Cocoa dialled back from its intraday high as investors took profits, though buying came in as prices dipped, dealers said. "The market is trying to consolidate what has been a very strong trend," said a London-based broker.
Second-month cocoa was up 1.4 percent from last Friday's close and up more than 16 percent from a March low of $2,034 per tonne. Both the New York and London markets have rallied since March amid bullish technicals based on historical price charts. On a fundamental basis, views on West Africa's mid-crop were mixed, with a lack of consensus on supply. "There's divided opinion between traders on the size of the mid-crop," Kona Haque, an analyst at Macquarie Bank, said.
The median forecast from a Reuters poll earlier this month on the size of Ivory Coast's mid-crop was 400,000 tonnes, above the average production over the past five years. July cocoa on Liffe finished down 9 pounds, or 0.6 percent, at 1,546 pounds a tonne, pressured by a strong sterling. July arabica coffee futures on ICE were down 3.45 cent, or 2.5 percent, to finish at $1.3395 per lb, after falling as low as $1.3305 a lb during late-session trading.
That was the lowest price for second-month contract since May 2010. The contract posted a weekly loss of 6.5 percent, its largest since December. Coffee's tumble near the end of the session was driven by technical factors, following a failure to reach Thursday's highs, dealers said. Arabica futures have been under pressure from a large net short position held by speculators, and continued selling drove prices to a fresh low on Friday, said Price Futures Group's Scoville.
July robusta coffee futures on Liffe were up $23, or 1.2 percent, to close at $2,007 a tonne after mixed trading throughout the session. May raw sugar futures finished down 0.05 cent, or 0.3 percent, to settle at 17.36 cents a lb, down nearly 4 percent from last week's close. The spot contract touched 17.25 cents the previous session, the lowest level for the front month since July 2010. Open interest in May totalled 57,936 contracts on Thursday ahead of the contract's expiry on April 30.
The most-active July raw sugar contract closed up 0.04 cent, or 0.3 percent, at 17.42 cents a lb, but still registered a loss of about 2.6 percent from last week's close. August white sugar on Liffe was up $1.90, or 0.4 percent, to settle at $500.60 a tonne.