ICE cocoa springs back, arabica coffee falls again

Cocoa futures on ICE rebounded from three-month lows on Wednesday, as the markets found support around their 200-day moving averages after plunging 7 percent earlier this week, while arabica coffee fell for the fourth straight session. July New York cocoa settled up $7, or 0.3 percent, at $2,296 per tonne, after tapping a three-month low at $2,258.
The July contract turned higher after finding chart-based support just above the 200-day moving average at $2,235 and falling to technically oversold territory on the 14-day relative strength index, traders said.
The benchmark contract dropped nearly 14 percent in May, quickly taking prices below a 1-1/2-year high.
Some concern that dry weather in top grower Ivory Coast could hurt the mid-crop helped to underpin prices, though some traders said it was too soon to worry.
"Farmers in Ivory Coast fear that insufficient rainfall could still hamper the remaining mid-crop. If this is reflected in the shipment data, the price could rise quickly again," Commerzbank said in a market note.
July London cocoa settled up 7 pounds, or 0.43 percent, at 1,646 pounds per tonne, after dipping to a three-month low of 1,615 pounds.
It turned higher after reaching the 200-day moving average at 1,625 pounds.
July arabica coffee settled down 1.2 cent, or 1 percent, at $1.1825 per lb, the lowest since May 21.
Prices fell for the fourth straight session as attention shifted from the truckers' strike in top grower Brazil, which ended last week, to return to the prospect of a huge crop there, traders said.
July robusta coffee settled up $4, or 0.23 percent, at $1,751 per tonne.
July raw sugar settled up 0.18 cent, or 1.50 percent, at 12.2 cents per lb.
Dealers pointed to signs that the market's long-term downtrend may be running out of steam, amid concern about dry weather in Center-South Brazil and after speculators cut their net short position over the past six weeks.
"The sharp reduction in the net short positions held by hedge funds can be interpreted as an indication of speculators' expectations of a limited downside price potential from current levels," the International Sugar Organization said in a monthly report issued on Wednesday.
August white sugar settled up $3.60, or 1.1 percent, at $347.30 per tonne.
India will stockpile 3 million tonnes of sugar to soak up excess supply from the domestic market, and grant soft loans to help millers expand ethanol output capacity, the food minister said.