Cocoa futures on ICE rose on Thursday, lifted by speculative short-covering, while position rolling out of the spot contract boosted volume in the New York market. Sugar prices fell amid worries over ample global supplies, with the raws dropping 3 percent after breaking below chart-based support.
May New York cocoa settled up $23, or 1.1 percent, at $2,060 per tonne, trading within the prior session's range and holding above the 200-day moving average at $2,015. Volume was heavy due to heavy position rolling out of March into May, traders said. Dealers pointed to speculative short-covering and the firm British pound versus the US dollar as key supportive factors.
"We have seen a reaction to the swings in currency," said one dealer. "And short-covering is the main form of the game from the speculators." March London cocoa settled up 12 pounds, or 0.8 percent, at 1,460 pounds per tonne. March raw sugar settled down 0.42 cent, or 3 percent, at 13.58 cents per lb, but remained well within this week's trading range. Prices extended losses after falling below technical support at 13.7 cents, traders said.
Total open interest dropped sharply from last week's 10-year high, falling by 36,737 in three sessions to 915,746 contracts on Wednesday, ICE data show. May white sugar settled down $8.30, or 2.3 percent, at $357.10 per tonne. The move widened the March contract's discount under May to a three-month low at $6.10 versus $4.40 on Wednesday, potentially indicating a lack of nearby demand.
Prices were pressured by a bearish fundamental picture amid a surge of output from the European Union, Thailand, India and Pakistan this season. The premium of front-month white sugar over raw sugar fell as low as $49.42 per tonne, the weakest since September. "The whites premium remains stubbornly weak," said Nick Penney, senior trader at Sucden Financial. "Further forward, the premium is even weaker, which is impacting on refiners' margins and reflects the availability of lower quality whites."
March arabica coffee settled down 0.45 cent, or 0.4 percent, at $1.2285 per lb, in heavy volume due to position rolling into May, traders said. Prices were pressured by a falling Brazilian real, which attracts producer selling. March robusta coffee settled up $7, or 0.4 percent, at $1,793 per tonne. Dealers said robusta prices remained vulnerable to producer hedging, with one estimating Vietnamese farmers have sold forward up to 30 percent of their crop so far.