ICE cocoa futures posted their largest daily loss in a month on Monday on profit taking as the market consolidated after touching a four-month high last week in reaction to better-than-expected first-quarter North American grindings. Raw sugar futures on ICE Futures US eased, pressured by accelerated harvesting in the centre-south of top producer Brazil, and arabica coffee edged down after mixed trading.
July cocoa on ICE settled off $23, or 1 percent, at $2,310 a tonne in the second-month contract's steepest one-day drop since late March. That was down from a four-month high of $2,348 reached on Friday. "There's a lot of resistance coming in at $2,400 and just below. That, and we've had a hot move on cocoa, and there's willingness to take profits at these levels," said Sterling Smith, a futures specialist with Citigroup in Chicago.
The second-month contract is up about 13 percent from an early March low of $2,046 per tonne. Noncommercial dealers more than tripled their net long position in cocoa futures and options, increasing it by 9,650 contracts to 13,360 contracts, the highest since January 1, US Commodity Futures Trading Commission (CFTC) data showed on Friday. In recent weeks, speculators switched to a bullish stance in cocoa.
North American cocoa grindings, a traditional indicator of demand, jumped nearly 6 percent in the first quarter of 2013, the biggest year-on-year increase since 2011 and well above trade estimates, National Confectioners Association data showed. July cocoa on Liffe fell 18 pounds, or 1.2 percent, to close at 1,537 pounds a tonne after hitting 1,561 pounds, its highest level since December. May raw sugar futures eased 0.10 cent, or 0.6 percent, to close at 17.87 cents a lb in range-bound trading. The contract touched a 2-1/2 year low of 17.47 cents on April 3.
"We will probably continue to trade the recent range around the 14-day average," said Thomas Kujawa of brokerage Sucden Financial Sugar. The spot contract's 14-day moving average stood at 17.80 cents a lb on Monday. Brazil's cane harvest was speeding up, benefiting from drier weather after a wet start to the month. The spot contract has felt support from concerns over delivery against the May contract as the wet weather slowed the start of the harvest.
Sugar prices have been pressured by expectations that steep global output will outstrip demand. Dealers expect some 500,000 tonnes of Mexican raw and white sugar supplies from a surplus to enter the international market in the coming months. Indian and Thai production is higher than initially expected, dealers said. Speculators cut their net short position in sugar contracts on ICE Futures US by 30 percent in the week ended April 16, CFTC data showed on Friday, following the previous week's record high. August white sugar on Liffe was down $4.80, or 0.9 percent, to finish at $504.0 a tonne. ICE July arabica coffee futures edged down 0.1 cent, or 0.1 percent, to settle at $1.4310 per lb.
July robusta coffee futures on Liffe closed down $9, or 0.4 percent, at $2,082 a tonne.