New York cocoa surges to 2-1/2-month high

New York cocoa futures on ICE changed direction and rallied to a 2-1/2-month high in post-settlement dealings on Wednesday, buoyed by short-covering and the firm British pound, while spot robusta coffee rose to its highest in nearly three months. May New York cocoa settled up $48, or 2.4 percent, at $2,084 per tonne, but later jumped by as much as 3.8 percent to a 2-1/2-month high at $2,114.
"It looks like short covering with the help of a firmer British pound," one US trader said, adding that some who took short positions on Monday may have been forced to buy. Total open interest fell to a two-month low at 254,458 lots on Tuesday, ICE data showed.
Technically, the benchmark contract held support at the 200-day moving average of $2,108. May London cocoa settled up 15 pounds, or 1 percent, at 1,485 pounds per tonne.
March robusta coffee ended up $5, or 0.3 percent, to $1,811 a tonne after rising to $1,821, its highest since Nov. 21. The spot contract was supported by automatic buy stops in thin trade, while the weak US dollar pressured both robusta and arabica, traders said.
Producer selling has also slowed ahead of the Tet holiday in top grower Vietnam, which was supportive for prices, dealers said. May arabica coffee settled up 0.05 cent, or 0.04 percent, at $1.251 per lb, giving up earlier losses.
"The funds and the systems are maintaining some pressure but the buying is there. There's probably some steady commercial pricing beneath the market," said Jack Scoville, vice president with Price Futures Group in Chicago. May white sugar settled down $3.10, or 0.9 percent, at $357.10 per tonne.
Dealers said prices were pressured by a looming global surplus amid strong production in the EU, India and Thailand. "From a supply and demand perspective, there's a lot of availability of sugar around and not enough demand," one dealer said.
A total of 36,600 tonnes of white sugar were tendered against the March contract that expired on Tuesday, ICE Futures Europe said, confirming dealer reports. May raw sugar settled down 0.13 cent, or 1 percent, at 13.31 cents per lb.
Dealers said light short-covering by speculators had been absorbed by producer selling. "There's a lot of producer pricing yet to come in," the dealer said.