Cocoa falls, sugar up

Cocoa futures on ICE fell on Thursday, as traders returned their focus to expectations for abundant supplies and lackluster demand, while raw sugar followed larger commodity markets higher as the dollar dropped. September London cocoa settled down 21 pounds, or 1.4 percent, at 1,513 pounds per tonne. September New York cocoa settled down $20, or 1 percent, at $1,927 per tonne, marginally below the 50-day moving average for the second straight session.
The New York market's failure to reach $1,950, which "has been a magnet every month this year" provided pressure, said Peter Mooses, senior market strategist for RJO Futures in Chicago. "Also, the big rain fall in key growing regions received, may be hurting the current crop, but (is) helping the long-term outlook which could lead to even higher production and lower prices," Mooses said.
Six exporters and pod counters said that recent widespread flooding in Ivory Coast's western cocoa growing regions will cut main crop output from October to December by between 20 and 30 percent compared with previous expectations. October raw sugar settled up 0.2 cent, or 1.5 percent, at 13.92 cents per lb, trading within the range of the prior two sessions. "The commodity complex in general is in a bullish mood and cross correlation may be high at a time of intensive fund activity," said Rabobank in a note about sugar.
The 19-market Thomson Reuters CoreCommodity Index rose as much as 0.8 percent, the eighth session higher out of nine. October white sugar settled up $2.20, or 0.6 percent, at $389.10 per tonne. The August premium over October rose to a session high of $28.80, the highest for the contract and a sharp rise from $16.10 at the end of June. Dealers said the premium surged on short-term supply tightness. September robusta coffee settled down $7, or 0.3 percent, at $2,150 per tonne.
Robusta was about 32 cents per lb cheaper than arabica futures on Thursday, near last month's low around 24 cents, the smallest since at least 2008. By comparison, low grade arabica varieties were about 40 cents cheaper in the physical market, dealers said. "With the arbitrage at 30 (cents), there's more interest obviously in taking low-cost arabica than robusta," said one dealer. September arabica coffee settled down 0.9 cent, or 0.7 percent, at $1.291 per lb.