Cocoa futures dipped to a one-month low on Monday, pressured by broad commodity weakness and a firmer dollar. Coffee prices also slipped, while sugar closed up. The most-active December New York cocoa contract settled down $57, or 2.9 percent, at $1,920 per tonne, pressured by the firmer dollar, hitting its lowest since dropping to $1,907 on July 14.
Broad commodity weakness led by a slip in energy markets, also weighed on prices. The dollar weighed as it recovered from its biggest weekly drop in three weeks. Local markets tested the 1,900 a tonne range based on weight fundamentals, said James Cordier, founder of OptionSellers.com in Tampa, Florida.
"Open interest indicates liquidation in this market and it continues again today," Cordier said. December London cocoa settled down 44 pounds, or 2.8 percent, at 1,510 pounds per tonne, after dropping to 1,505, also a one-month low. December arabica coffee settled down 3.35 cent, or 2.33 percent, at $1.405 per lb.
Prices were also partly pressured by broad commodity weakness and the stronger dollar. Coffee fundamentals continued to show an oversupply in the market, as winter in Brazil comes to a close and the possibility for a freeze appears to be less, Cordier said. "Everybody talks about how demand isn't good," said managing partner of commodity trading for NickJen Capital in New York.
September robusta coffee settled down $34, or 1.59 percent, at $2,105 per tonne. Technicals have weakened since and physical demand is still sluggish as roasters remain well covered. "The cash market has not kept up with the futures market rally. The changing of hands of coffee itself does not match the rise we've had in the futures market," Cordier said.
October raw sugar settled up 0.3 cent, or 2.27 percent, at 13.5 cents per lb, after touching 13.11 cents last week, a six-week low. Coffee and cane areas in Brazil are expected to receive substantial amounts of rain in the coming days, breaking a long dry spell that led to worries about crop development.
"That's going to delay the first half of the month's crop," Gentile said. At current levels, sugar is less attractive to some Brazilian producers than ethanol, which could inspire some to change their production mix, dealers said. October white sugar settled up $6.10, or 1.7 percent, at $370.50 per tonne.
Comments
Comments are closed.