Cocoa futures rose on Monday as the market resumed its advance after toppling from multi-month peaks in the prior session while sugar and coffee prices were slightly lower.
May New York cocoa was up $26, or 1.1 percent, at $2,491 a tonne at 1156 GMT. Prices have risen by more than 30 percent since the start of the year.
The contract peaked at $2,539 on Friday, a 16-month high for the second month, before a wave of profit-taking saw the market slide to a session low of $2,444.
Dealers said speculators were continuing to add to long positions on Monday despite indications that the market remains heavily overbought.
“Everyone is really screaming for a pullback but the opposite is happening now,” one dealer said.
Speculators increased their net long position in cocoa contracts on ICE Futures U.S. to a 1-1/2-year high in the week to March 6, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
The rise has been largely fuelled by technically-driven fund buying, although diminished crop prospects in top grower Ivory Coast has also helped to support prices.
May London cocoa was up 34 pounds, or 2.0 percent, at 1,775 pounds a tonne.
May raw sugar was off 0.02 cent, or 0.2 percent, at 12.82 cents per lb, drifting down towards Friday’s 8-1/2 month low of 12.75 cents.
Dealers said the market remained on the defensive despite the prospect of an increase in cane use for ethanol in Brazil, partly due to rising output in number two producer India.
Brazil’s Copersucar, the world’s largest sugar merchant, expects an output of the sweetener to fall by 5 million tonnes in the new center-south cane crop that starts in April, as mills earmark more cane to ethanol production instead.
Production in the European Union may also decline.
“The weather in Europe is cold and wet, and forecast to remain wet. This will delay sowing of beet seeds,” Marex said in a weekly update.
“Since there will be a lot of beet, they will have to begin to be dug up early too; so they will have less time to mature than usual; so yields may be down on last year.”
May white sugar fell $1.00, or 0.3 percent, to $356.30 per tonne.
May arabica coffee was down 0.40 cent, or 0.3 percent, at $1.1975 per lb.
May robusta coffee fell $9, or 0.5 percent, to $1,771 a tonne.
Frontpage September 2, 2019