New York cocoa falls 3 percent as charts sour; sugar, coffee rise

New York cocoa futures on ICE dropped 3 percent on Wednesday, pressured by chart-inspired speculative selling and signs of ample supplies, while a firmer Brazilian real boosted arabica coffee and raw sugar prices. March New York cocoa settled down $45, or 2 percent, at $2,210 per tonne, after falling to $2,185, its lowest since Oct. 25.
Prices dropped sharply in the prior session in tandem with equity and energy markets, but mostly recovered by the close.
Dealers said the market was again under pressure on Wednesday on technical factors, which prompted speculative selling.
"The market has now got technically over-bought," said one European dealer. "And the background macro is probably not helping either."
Focus also remained on top grower Ivory Coast, where strong port arrivals since the start of the season on Oct. 1 have bolstered expectations for ample global supplies.
"The front part of the crop has been really good," the dealer said. "And the industry has good cover, so they've stepped back."
Mid-crop flowering will be supported by any incoming rains, weather service Radiant Solutions said.
March London cocoa settled down 19 pounds, or 1.2 percent, at 1,619 pounds per tonne, with dealers pointing to producer hedging as one factor weighing on prices. Prices slid to 1,604 pounds a tonne, the lowest since Oct. 19.
March arabica coffee settled up 3.45 cents, or 3.1 percent, at $1.162 per lb, also boosted by the Brazilian real.
"Because of the weaker dollar, the real is getting a bit stronger, so that's very helpful for the price of coffee," said Stephen Maass, commodities analyst at the Hightower Report.
January robusta coffee settled up $7, or 0.4 percent, at $1,663 per tonne. Prices also hit a six-week low a day earlier.
March raw sugar settled up 0.04 cent, or 0.3 percent, at 12.65 cents per lb,
reversing course after touching 12.53 cents, its weakest since Oct. 5.
Prices fell sharply in the prior session, but found some support on Wednesday from a rise in the Brazilian real.
December white sugar settled up $5.10, or 1.17 percent, at $346.60 per tonne.
Focus was on India, which could produce 7.4 percent less sugar than forecast as mills reported a sharp drop in sugar cane yields due to drought and white grub infestations in key growing areas.