New York cocoa futures on ICE turned lower after rallying to a 1-1/2-year high on Thursday, pressured by profit-taking, while sugar prices bounced above the prior session's multiyear lows. July New York cocoa settled down $34, or 1.2 percent, at $2,802 per tonne, after rallying to $2,943, its highest since September 2016.
Prices were buoyed earlier by signs of improved demand after Hershey Co reported strong sales in North America, while signs of smaller-than-expected crops in West Africa have also been supportive. Profit-taking pushed prices lower just below the resistance level of $2,950, traders said.
The drop in prices weakened the New York July contract's rare premium over London July for the first time in 10 sessions. This took it below Wednesday's level, which was a 41-year high above $230. July London cocoa settled up 13 pounds, or 0.7 percent, at 1,875 pounds per tonne.
Origin hedging has capped gains in London, although dealers noted this pressure was easing as producers in Ivory Coast and Ghana were now seen as relatively well hedged. May raw sugar, which expires on Monday, closed up 1 percent at 10.97 cents per lb, above the prior session's 2-1/2-year low. Open interest was down 9,755 lots at 53,840 lots as of April 15.
Most-active July settled up 0.26 cent, or 2.3 percent, at 11.38 cents per lb, its strongest one-day rise in eight weeks. This caused the May discount to July to widen sharply to as much as 0.42 cent, the biggest for the contract.
August white sugar settled up $9.40, or 3 percent, at $321.70 per tonne, rebounding above its lowest since December 2008 on Wednesday. Prices corrected higher after falling to technically oversold levels on Wednesday, traders said.
"There are some commercial longs coming in again. Fundamentally, though, the numbers for production and surplus are so big, it's hard to imagine what could change quickly," said a European analyst. The Brazilian unit of Cofco is likely to raise 2018-19 ethanol output and the sector could even cancel sugar sales contracts, said Mauricio Sacramento, Cofco's head of sugar trading.
July arabica coffee settled up 0.85 cent, or 0.7 percent, at $1.1965 per lb. "We're hearing people aren't interested in shorting it. It might be at a bottom," said Peter Mooses, senior market strategist for RJO Futures in Chicago. July robusta coffee settled up $11, or 0.6 percent, at $1,771 per tonne.