Cocoa extends bounce above multi-year lows, robusta gains

Cocoa futures on ICE rallied on Thursday, extending the prior session's bounce up from multi-year lows and oversold territory as the markets corrected higher, while robusta coffee rose as Brazil appeared to move closer to allowing imports.
Sugar prices fell.
New York May cocoa settled up $55, or 2.8 percent, at $2,042 per tonne, extending gains after the prior session's 4.3 percent surge that lifted prices above the lowest in more than eight years.
The market was still viewed as bearish due to selling related to a wave of defaults in top producer Ivory Coast and expectations for a global surplus.
Dealers said the rise continued to be driven by short-covering, although the upside was limited due to ample supplies.
"The forecast is still very good, the weather is very favorable. And the industry is still well-covered so they're not going to chase the market up," one dealer said.
May London cocoa settled up 39 pounds, or 2.4 percent, at 1,653 pounds per tonne.
"Our view is that the export defaults have the potential to weigh on cocoa farm income in Cote d'Ivoire through lower farmgate prices for the mid crop and/or future seasons. This will provide lower incentives for farmers to increase output," said Alexandre Andrey, commodities analyst for BMI Research, pointing to greater risks for lower production in the next few years.
May robusta coffee futures settled up $31, or 1.4 percent, at $2,179 per tonne.
Dealers said the market was supported by positive chart-based buy signals after the market bounced up from a six-week low on Wednesday.
The market has been monitoring the possibility that Brazil could import robusta after a technical group linked to its Foreign Trade Chamber committee approved it, though approval from an executive management committee is still required.
If ratified next week, it will be the first time Brazil has imported robusta in decades, although dealers said the market remains cautious ahead of a final decision.
May arabica coffee settled up 1.45 cent, or 1 percent, at $1.484 per lb, with dealers noting earlier strength in Brazil's currency.
Raw sugar eased but remained in its recent trading range.
May raw sugar futures settled down 0.13 cent, or 0.6 percent, at 20.3 cents per lb. May white sugar settled down $1.80, or 0.3 percent, at $551.70 per tonne.