New York cocoa futures on ICE climbed on Monday in a technical rebound fuelled by a weaker dollar, while arabica coffee hit a fresh 3-1/2-month high, as technical signals improved, while raw sugar prices slipped. The September New York cocoa contract was up $27 or 1.35 percent, at $2,021 a tonne by 1344 GMT, after hitting a session high of $2,043.
Prices tumbled on Friday, with the front month closing 3.3 percent lower after a sharp rally in the dollar weakened the chart structure in the market and triggered technical sell stops, dealers said. The market was supported on Monday by a more subdued dollar as investors focused on inflation data due this week that could determine the currency's longer-term trajectory.
Dealers also pointed to technically-driven short-covering by speculators as chart signals improved on Monday. "Not all have been willing to surrender," one dealer said. "We've had a reaction to the sell-off. Technical targets seem to be more enticing too but you have to take these with a pinch of salt." Market participants continued to monitor the progress of the new crop in top producer Ivory Coast, where heavy rains have recently given way to more crop-friendly weather conditions.
September London cocoa was up 16 pounds, or 1.02 percent, at 1,579 pounds a tonne. September arabica coffee rose 1.90 cents, or 1.36 percent, to $1.4205 per lb, hitting its highest level since April 19. The market was supported by firmer technicals after prices managed to climb back above the key $1.40 mark, while a weaker dollar also lent support. "The indicators continue to favour the upside," said Sucden Financial's Geordie Wilkes in a market update, noting prices could gain further if they manage to gain a foothold over the $1.45 mark.
September robusta coffee gained $16, or 0.75 percent, to $2,157 per tonne. October raw sugar fell 0.17 cents, or 1.20 percent, to 13.97 cents per lb, reversing course after earlier gains. Prices were pressured by broader commodity weakness, led by a slump in oil prices. October white sugar fell $0.90, or 0.23 percent, to $386.00 a tonne, after hitting a session high of $391.40.
Speculators switched to a net long position in white sugar of 2,822 lots as of August 1, exchange data showed on Monday. Market participants were closely monitoring whether India will allow further imports at a reduced duty before the new crop supply becomes available in late October.