LONDON: London cocoa futures on ICE rallied for a third straight session on Monday, extending their recovery from last week’s 6-1/2 month low as dealers deemed much of the good news priced in for now.

COCOA

December London cocoa ??was up 3.2% to 5,425 pounds per metric ton at 1319 GMT.

Prices slumped to 4,975 pounds last week thanks to bets on improved West African production in the 2024/25 (October-September) season, but have recovered sharply since then.

London cocoa speculators had raised their net long position by 1,192 lots to 24,321 lots as of Sept. 3, exchange data showed.

“Open interest has been destroyed, it’s half what it used to be, so industry is not doing much hedging (on the sell side),” said a dealer

He added that a larger than normal proportion of next season’s Ivorian and Ghanaian crop had already been forward sold, meaning less hedge selling pressure.

“We’re 40% off the highs. For the market to go lower is going to be very difficult,” he said.

Cocoa arrivals at ports in Ivory Coast between Oct. 1 and Sept. 8 fell 25.8% versus the same period a year ago, exporters estimated.

December New York cocoa rose 4.3% to $7,385 a ton.

COFFEE

November robusta coffee rose 1.6% to $4,848 a ton, still some way off last week’s peak of $5,180, which was the highest in at least 16 years.

December arabica coffee rose 2.7% to $2.4230 per lb, having lost 3.3% last week.

Speculators reduced their net long position in Arabica coffee by 4,096 contracts in the week to Sept. 3 to 39,101, data showed.

Elevated global exports, increased recent shipments from Brazil, and forecasts for rains in the world’s top producer are keeping arabica’s gains in check.

SUGAR

October raw sugar fell 1.2% to 18.68 cents per lb, having lost 2.4% last week.

As with arabica, forecast rains in Brazil, also the world’s top sugar producer, are weighing on prices.

October white sugar dipped 0.9% to $529.30 a ton.