New York cocoa futures on ICE plunged to a five-month low on Friday, giving up gains from the prior session's rally after the benchmark contract failed to close above its 200-day moving average, while raw sugar neared a three-month low. September New York cocoa settled down $82, or 3.5 percent, at $2,233 a tonne. It dropped to $2,212, the lowest level for the spot contract since Feb. 28.
For the week, the spot contract dropped for the second straight week after speculators cut their net long position. In the previous session, the September contract rallied above its 200-day moving average but failed to close above it. That failure helped prompt Friday's sell-off, one US trader said, despite signs of rising demand.
The market shrugged off lower cocoa purchases in Ivory Coast this month due to deteriorating quality, traders there said. December London cocoa settled down 45 pounds, or 2.6 percent, at 1,677 pounds a tonne.
The London market was vulnerable to origin selling as top grower Ivory Coast has picked up hedging recently, dealers said. A court in Ivory Coast has ordered the liquidation of top exporter SAF-Cacao over debts owed to the Coffee and Cocoa Council marketing board, the company's CEO told Reuters.
This was considered bearish, traders said.
October raw sugar settled down 0.15 cent, or 1.4 percent, at 10.88 cents per lb, just above the prior session's three-month low of 10.83 cents.
The spot contract closed the week down 2.2 percent.
Weakness in the October/March spread due to concerns of a weakening cash market has pressured raw sugar futures, James Liddiard, of consultancy Agrilion, said in a note.
The October discount to March fell to 0.91 cent, the lowest since June 4.
October white sugar settled down 20 cents, or 0.06 percent, at $323.90 a tonne.
September arabica coffee settled up 0.009 cent, or 0.8 percent, at $1.1045 per lb.
For the week, the spot contract closed down slightly, dropping for the seventh week out of the past eight as the weak Brazilian real and expectations for a large harvest there pressure prices.
Total open interest rose for the eighth straight session to reach a record 326,381 lots, ICE data shows.
Reports of dry weather in top grower Brazil and strong demand signals from producing countries offered support, said Steve Platt, futures strategist at Archer Financial Services. September robusta coffee settled up $1, or 0.06 percent, at $1,653 a tonne.
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