Cocoa futures on ICE rallied more than 3 percent to the highest since 2016 on Wednesday, buoyed by chart-based buying and stronger-than-expected European grind data, while raw sugar rebounded from a 2-1/2-year low. July New York cocoa settled up $96, or 3.6 percent, at $2,800 per tonne, after surging to $2,856, the highest since September 2016.
The second-position contract has rallied 8.7 percent this week so far, on track for its strongest weekly performance since August 2012. Prices rallied after the market breached resistance at Tuesday's high of $2,727 with buy-stops triggered during a rapid advance to the new peak, traders said. July London cocoa settled up 52 pounds, or 2.9 percent, at 1,874 pounds per tonne, after rising to 1,889 pounds, the highest for the second-position contract since December 2016.
Also supportive, European cocoa grind data rose 5.5 percent to 358,432 tonnes in the first quarter, higher than expected, while it rose more than 2 percent to 130,000 tonnes in Ivory Coast, the world's biggest producer. For Europe, this was the strongest quarterly grind since 2011 and the largest first quarter on records dating back to 1999.
"We are of the opinion that there is a greater percentage of cocoa consumption that is not captured in the traditional chocolate confectionery category, such as artisan chocolate," said Jonathan Parkman, head of agriculture at Marex Spectron. Traders will now focus on first-quarter grind data from North America on Thursday, with estimates ranging from 1.5 percent lower to 2 percent higher, and Asia on Friday.
July raw sugar settled up 0.09 cent, or 0.8 percent, at 11.91 cents per lb, after slumping to the lowest since September 2015 at 11.77 cents. Prices turned higher as the market attempted to consolidate after reaching technically oversold levels, traders said. August white sugar settled up $5.30, or 1.6 percent, at $341.10 per tonne.
The August white premium over May raws rose above $82, the highest since July 2017 and up sharply from around $68 the week prior. "The divergence between the raws and whites prices ... is probably being driven by trade fears that ageing Thai raws will end up in the New York (raws) delivery," Commonwealth Bank of Australia analyst Tobin Gorey said. July arabica coffee settled up 1.3 cents, or 1.1 percent, at $1.1715 per lb. July robusta coffee settled up $18, or 1 percent, at $1,772 per tonne.