ICE cocoa surges to three-week highs; sugar coffee higher

Cocoa futures on ICE rallied more than 3 percent to three-week highs on Wednesday, after flooding in the commercial capital of Ivory Coast spurred speculative buying and the spot contract in London extended its premium over September.
Sugar and coffee prices also rose, along with larger commodities that rebounded. The 19-market Thomson Reuters CoreCommodity Index rose for the first time in six sessions.September London cocoa settled up 63 pounds, or 3.6 percent, at 1,840 pounds per tonne, after touching 1,842 pounds, its highest since May 31.
The July premium over September rose to a session high of 14 pounds, a sharp move from a discount of 78 pounds four sessions prior.
The dramatic shift in the spread forced many market participants who held short positions to buy, while it also boosted market sentiment as it could potentially indicate strong demand for July delivery, traders said. "(It) gives quite a bullish tone to the market," one dealer said. "That might bring back some interest in London, which has been lagging behind the New York market."
Flooding in Ivory Coast's commercial capital Abidjan killed at least 18 people and attracted speculative buying in both markets, traders said, though it was not known if this had damaged any cocoa in warehouses or in transit.
Earlier weakness in the British pound, which slid to a fresh seven-month low on the back of worries about the latest round of Brexit negotiations, added further support to London prices.
September New York cocoa settled up $100, or 4.1 percent, at $2,553 per tonne, with the session peak at $2,562, also the highest since May 31.
October raw sugar settled up 0.06 cent, or 0.49 percent, at 12.19 cents per lb, after sliding in the prior session along with other commodities.
This was the contract's first rise in five sessions, with support coming from earlier strength in the Brazilian real against the US dollar as it diminished local returns on dollar-traded commodities like sugar, discouraging Brazilian producers from selling.
August white sugar settled up $3.30, or 1 percent, at $342.10 per tonne.
September robusta coffee settled up $10, or 0.59 percent, at $1,695 per tonne, recovering from Tuesday's two-year low of $1,665. September arabica coffee settled up 0.25 cent, or 0.2 percent, at $1.1665 per lb, also rebounding above the prior session's 2016 low.