Liffe July cocoa ends 8 pounds higher at 2,113 pounds a tonne on Monday. Market supported by heavy fighting in a cocoa-producing area of western Ivory Coast. Liffe May white sugar falls $10.20 to close at $701.60 a tonne. An improving outlook for the harvest in top producer Brazil contributed to market weakness.
Liffe May robusta coffee ends $43 lower at $2,561 a tonne. Market weighed by technically-driven losses in ICE arabica coffee futures. Talk that sugar crops will be bigger than expected in the world's second-biggest sugar exporter Thailand and in India, the No 2 producer and top consumer, was also seen adding some pressure.
"We were hearing some news that the Thai and Indian sugar crops were going to be better than expected, so that put some pressure on the market," said Nick Gentile, chief trading officer at Atlantic Capital Advisors in Jersey City. Rains have disrupted the early cane harvest in Brazil but could boost the crop outlook for later in the season. "Late rains are usually quite positive for cane development and yields during the second half of the season," said Peter de Klerk, an analyst at sugar merchant Czarnikow.
Dealers said technicals on sugar were bearish. Societe Generale technical analyst Stephanie Aymes said in a market note that key support on May raws was at 26.30 cents with a drop below that level signalling a move down to 26.00-25.80 cents, 25.20 cents or even 24.60 cents Cocoa futures edged higher as the market kept a close watch on conflict in Ivory Coast. Heavy clashes broke out in the town of Duekoue, in a cocoa-producing area of western Ivory Coast, between forces loyal to incumbent Laurent Gbagbo and his rival in an election dispute.
"This could have some longer term effect on the markets. Farmers are worried about their lives right now, not their crops, and they're ignoring their crops," Gentile said. Uncertainty about whether or not the Ivorian export ban, set to expire later this week, would be extended, also attracted some buyers, traders said.
International Cocoa Organisation (ICCO) Executive Director Jean-Marc Anga said on Friday a ban on exports from Ivory Coast was leading to increasing supply concerns for chocolate manufacturers. "People are just digesting what's going on and people want to see what's going on with this export ban," Gentile said.
Coffee slipped on chart-based pressure as arabica coffee futures continued to fall from the 34-year high at $2.9665 per lb, basis May, and as many sat on the sidelines following recent volatility. "You've got people playing this market with very tight stops and it's been pretty quiet which is reflected in the volumes," a London-based broker said.
"The trade are not doing anything unless they have to."