Cocoa futures turned lower on profit-taking after rising to one-month highs on Friday, but still closed the week higher on concerns that adverse crop weather in top grower Ivory Coast could limit an anticipated rebound in 2016-17 production. Arabica coffee futures turned higher as traders eyed forecasts for cooling temperatures in some of top producer Brazil's growing regions early next week, while sugar prices fell along with larger commodity markets as the US dollar rose.
December London cocoa settled down 9 pounds, or 0.4 percent, at 2,446 pounds per tonne after climbing to 2,458 pounds, a one-month peak for the benchmark second month. Dealers said profit-taking stalled the advance although London prices closed the week up 2.9 percent. December New York cocoa settled down $14, or 0.5 percent, at $3,099 per tonne, after rising to $3,120, the highest since July 15. It finished the week up 4 percent.
Dealers said there should be a clearer indication of crop prospects in Ivory Coast in the next four to six weeks but a significant rise in production is needed if forecasts for a global surplus in the 2016-17 season are to hold. "Most market observers envisage a supply surplus in 2016-17, primarily thanks to significantly higher cocoa production in Ivory Coast," Commerzbank said in a market note.
"Having said that, most growing areas have seen too little sunshine in recent weeks, which has doubtless hampered the development of the cocoa beans for the upcoming main crop. Some cocoa farmers therefore expect the 2016-17 crop season to get off to a weak start." December arabica coffee futures settled up 0.15 cent, or 0.1 percent, at $1.416 per lb, ending the week up 0.9 percent. The September/December spread traded in a wide range from a $3.40 discount to a $2.30 discount ahead of the September contract's first notice day on August 23. September robusta coffee settled down $6, or 0.3 percent, at $1,817 per tonne.
Dealers said dry weather in top robusta producer Vietnam remained a concern, with a tropical storm heading to the northern part of its coffee belt likely to bring only limited relief. Sugar futures were lower, weighed partly by a strengthening dollar. ICE October raw sugar settled down 0.21 cent, or 1.1 percent, at 19.77 cents per lb. It closed the week up 0.3 percent after five choppy sessions. October white sugar settled down $10.30, or 1.9 percent, at $525.3 per tonne.