New York cocoa at 4-1/2-month low, sugar down

New York September cocoa futures on ICE fell to the lowest price in 4-1/2 months on arbitrage selling by speculators and easing commercial demand, while ample global supplies weighed on sugar prices. September New York cocoa settled down $45, or 1.9 percent, at $2,292 per tonne, after falling to $2,288, the lowest since March 1.
"What's driving volatility in cocoa for the most part are the funds," said Jason Estrada, senior trader at INTL FC Stone in Miami. "The commercials are pretty well-covered ... clients are looking to purchase for 2020. That means they've got 2018 and 2019 covered," Estrada said. A weak British pound, which plunged to a 10-month low against the dollar, encouraged arbitrage trading as speculators bought London futures and sold New York, dealers said.
"The 200-day simple moving average is around $2,289 on a (spot) continuation chart ( ). If you break that, things could get ugly," said Estrada. September London cocoa settled down 16 pounds, or 0.9 percent, at 1,693 pounds per tonne, after trading higher for most of the session.
Second-quarter North American grindings, due after market close on Thursday, are seen between 1 percent lower and 1 percent higher. Asian data, expected on Friday, is forecast 6 to 10 percent higher. October raw sugar settled down 0.1 cent, or 1 percent, at 10.97 cents per lb. October white sugar settled down $3.70, or 1.2 percent, at $318.40 per tonne, the lowest since mid-May.
Prices have been pressured by expectations of ample supplies, notably from India, where output has surged this season. The weakness of the market is highlighted by the financial difficulties faced by millers in top growing countries Brazil and India, James Liddiard of consultants Agrilion said in a market note.
In India, cabinet approval of a price hike for growers is putting added pressure on indebted mills. The world's top sugar exporters asked India, Pakistan and the European Union to eliminate subsidies, blaming such programs for weak prices and a supply glut, the Global Sugar Alliance for Sugar Trade Reform and Liberalization said.
September arabica coffee settled up 0.65 cent, or 0.6 percent, at $1.088 per lb, amid harvest in top grower Brazil of what is expected to be a record crop. September robusta coffee settled up $21, or 1.3 percent, at $1,672 per tonne.