Cocoa futures on ICE rose in heavy volume on Wednesday, lifting the New York market further above a one-year low set earlier this week on support from the firm sterling and growing concern about the mid-crop in parts of West Africa. Raw sugar turned lower in sympathy with weak oil prices while coffee rallied on chart-based buying.
March New York cocoa on ICE settled up $33, or 1.2 percent, at $2,724 a tonne, after surging 3.2 percent to $2,778, rising further away from Monday's one-year low at $2,669. Total volume exceeded 52,000 contracts, more than double the 250-day average, preliminary Thomson Reuters data showed. Volume was buoyed by heavy March/May spreading. Traders said bullish activity in deferred London cocoa options dealings spurred futures buying. Some expressed concern about the mid-crop in parts of Ivory Coast and Ghana, the world's top two producers.
There were 10,050 December call options traded at a strike price of 1,950 pounds a tonne and 4,600 calls at a strike price of 2,000 pounds, traders said. These were hedged with futures and the December contract's volume surged above 8,100 lots, by far its highest. "A lot of December calls have traded which suggest someone may be taking a large forward bet that there may be some (supply) problem down the road," one London dealer said.
Benchmark May London cocoa futures closed up 10 pounds, or 0.5 percent, at 1,893 pounds a tonne, finding resistance at the 200-day moving average at 1,920 pounds. The session high was 1,921. Raw sugar futures turned lower with March settling down 0.02 cent, or 0.1 percent, at 14.45 cents a lb after earlier peaking at 14.69 cents. The market turned lower as oil futures fell. March white sugar futures closed flat at $377.70 per tonne. Arabica coffee futures were firm but remained in the range they have held for the past two weeks, rising on chart-based buying after rising above the $1.60 level as rains in top grower Brazil were not as strong as normal. March arabica coffee rose 4.15 cents, or 2.6 percent, to $1.649 per lb. May robusta coffee futures ended up $22, or 1.1 percent, at $1,961 a tonne.