New York cocoa futures on ICE climbed on Thursday, flirting with the highest price since 2016 on fund buying and signs of industry demand, while arabica coffee hovered above last week's contract low after open interest rose to a record. May New York cocoa settled up $11, or 0.4 percent, at $2,535 per tonne, after rising to $2,567. This was not far from last week's peak of $2,587, the highest since November 2016.
May London cocoa settled up 11 pounds, or 0.6 percent, at 1,786 pounds per tonne. "Clearly the funds are responsible for keeping the momentum going," said one dealer, but noted the market was still awaiting more clarity on whether dry weather had in fact curbed output in West Africa. There were signs of upbeat industry demand, as chocolate processors sought to restock, dealers said.
Prices were also underpinned by a slowdown in selling by producers in West Africa, who are believed to be well-hedged, dealers said. Participants remained cautious, however, as the global market remains in oversupply, with dealers pointing to spot futures prices trading at a discount as a sign of ample stocks. May arabica coffee settled up 0.15 cent, or 0.1 percent, at $1.19 per lb. Prices remained near last week's contract low of $1.169.
Total open interest rose for the eighth straight session to a record 265,940 contracts on Wednesday, ICE data showed. The market appeared poised for a short-covering rally, with record open interest at low prices and speculators holding a large net short position, traders said. May robusta coffee settled down $10, or 0.6 percent, at $1,742 per tonne.
Robusta prices were partly weighed down by expectations for Indonesia's mini-harvest season to peak next month. May raw sugar settled up 0.1 cent, or 0.8 percent, at 12.77 cents per lb, with dealers pointing to light speculative short-covering. May white sugar settled up $2.70, or 0.8 percent, at $356.10 per tonne. Market sentiment has recovered on signs that exports from India are not viable due to strong local prices, after the country said it would scrap an export duty on sugar.
Prices hovered above Monday's 2-1/2-year low, however, as global supplies were still poised for a large surplus. "The market climate remains bearish but benign and we would expect fresh lows to be printed in the coming sessions," Sucden Financial's Tom Kujawa said in a market note.
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