London cocoa futures slid on Monday as weather reports from the world's biggest grower Ivory Coast showed good rainfall for crops while robusta coffee and sugar futures both closed lower, traders said. Cocoa peaked at four-year highs earlier this month but has since drifted lower as fears over lower production in West Africa have gradually eased.
Front month September ended 18 pounds lower at 1,083 pounds a tonne. December was off 14 pounds at 1,092 pounds as the strong pound against the dollar added to bearish fundamentals.
"The news out of Africa is still pretty good for crops, there's been nothing to bring prices alive," one trader said. Heavy rains in Ivory Coast's cocoa growing areas over the past week will help the development of the forthcoming October-March main crop, farmers and analysts said on Monday.
In the centre-western region of Daloa, which produces a quarter of Ivory Coast's cocoa, farmers reported downpours, which would strengthen trees ahead of the main crop.
Dealers said good industry buying below the market also continued to lend support. They said the buying around 1,090 pounds, basis December, had so far been fairly aggressive.
ROBUSTAS BELOW 9-YEAR HIGH, SUGAR UNDER PRESSURE: Robusta futures also lost ground during the afternoon session trade lower in a market that was still consolidating after a sell-off from the recent nine-year peak.
September closed off $24 at $1,853 a tonne in late trade, still comfortably above the last week's low of $1,773 but well short of the nine-year high for the second month of $1,945 set on June 22. "The market has recovered well but the rally doesn't feel that convincing," one dealer said.
Dealers said sales from major robusta origins like Vietnam had increased at the highs, capping any gains. And the large speculative long position held in London also made players nervous although there were no signs yet of any significant liquidation.
White sugar futures were also lower in late trade. October whites finished down $1.40 at $311.40 in a market that was still under pressure from excess supplies.