New throughout, adds comments from analyst, closing prices
NEW YORK/LONDON, Jan 7 (Reuters) – Cocoa futures on ICE rose sharply on Friday as the market appeared oversold after a recent weakness and dealers saw signs of improving demand.
Arabica coffee also jumped.
COCOA
* March New York cocoa CCc1 settled up $98, or 4%, to $2,521 a tonne, rebounding from the prior session’s two-month low of $2,408.
* March London cocoa LCCc1 rose 52 pounds, or 3.1%, to 1,705 pounds per tonne.
* Dealers said there were signs of demand recovery and that the market was ripe for a recovery after recent losses.
* “Bottom line, cocoa prices are fairly cheap and do not reflect current S&D (supply and demand) outlook,” said Marcelo Dorea, soft commodities analyst at First New York.
* “Although observers may disagree as to the size of a deficit out of the 2021/22 season, no one will argue that there isn’t one. In our view, the current season deficit is just about equal to the 20/21 season surplus,” he added.
* Grinding data for the fourth quarter to be released in coming days will show that demand continue to recover, he said.
COFFEE
* March arabica coffee KCc1 settled up 6.75 cents, or 2.9%, at $2.3845 per lb.
* Dealers said the outlook for this year’s crop in Brazil remained the focus with unfavourable climate hurting prospects and concern that recent rains had been excessive in some areas.
* Rains have flooded coffee fields in central eastern areas in Brazil, the latest in a climate roller-coaster for the country.
* Certified ICE arabica coffee stocks were at 1.52 million bags as of Jan. 6, down from 1.6 million a month earlier.
* “At this rate, it’s not inconceivable to see 1 million or less by summer … this should in turn lead to a more inverted market which will also encourage funds to continue to position from the long side,” Cardiff Coffee Trading said in a report.
* March robusta coffee LRCc2 rose $9, or 0.4%, at $2,316 a tonne.
SUGAR
* March raw sugar SBc1 lost 0.14 cent, or 0.8%, at 18.05 cents per lb after falling to a five-month low of 17.99 cents.
* Dealers said an improving outlook for cane production in Brazil had helped to put the market on the defensive.
* Cane harvests in India and Thailand started well and production in both countries could potentially be higher than expected.
* March white sugar LSUc1 fell $0.30, or 0.1%, at $485.80 a tonne.
(Reporting by Marcelo Teixeira and Nigel Hunt; editing by David Evans, Kirsten Donovan)
(([email protected]; +1 332 220 8062; Reuters Messaging: [email protected] – https://twitter.com/tx_marcelo))
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