July 26, 2018 / 7:24 PM / 3 months ago

SOFTS-Cocoa erases week's losses, raw sugar sinks to 3-month low

(Rewrites throughout, updates prices; adds comment, NEW YORK dateline)

NEW YORK/LONDON, July 26 (Reuters) - Cocoa futures on ICE rallied on Thursday, rebounding from their lowest levels in nearly five months in a corrective bounce and on signs of rising demand from chocolate makers, while raw sugar fell 3 percent below chart-based support to a three-month low.

COCOA

* September New York cocoa settled up $70, or 3.1 percent, at $2,315 a tonne, after rallying by as much as 4.6 percent. In the prior session, prices dropped to $2,233, their lowest in nearly five months on producer hedging and long liquidation.

* September London cocoa settled up 47 pounds, or 2.9 percent, to 1,693 pounds a tonne, after falling to 1,636 pounds, the lowest since March 2.

* The markets bounced after finding chart-based support and becoming technically oversold, traders said, with the London market closing back above the key 200-day moving average while New York settled just below it.

* Signs of stronger demand supported prices, traders said, after Hershey Co topped estimates for quarterly sales and profit on Thursday, in part due to higher demand for its chocolates.

* This followed an improved North American growth outlook for chocolate by Lindt & Spruengli, and higher sales of Cadbury chocolates and Oreo cookies by Mondelez International Inc

* Good weather in West Africa has bolstered expectations of a sizeable crop, though dealers are following reports of heavy, crop-damaging rains in Ivory Coast.

SUGAR

* October raw sugar settled down 0.16 cent, or 1.4 percent, at 11.03 cents per lb, after trading as low as 10.83, its lowest in 3 months.

* Prices were pressured by a weakening in the currency of top-producer Brazil, which encourages producer selling.

* Over the past 10 days, prices had been trading within the range established on July 16 of between 11.39 and 10.86, said one U.S. trader. “Today we broke that low and that triggered more selling,” the trader said.

* A lack of bullish signals in Brazilian production data released on Wednesday also pressured prices, one U.S. trader said, pointing to the increase in cane sugar content.

* Focus remained on ample global supplies, particularly in India and Thailand.

* October white sugar fell $3.30, or 1 percent, at $324.10 a tonne.

COFFEE

* September arabica coffee settled down 0.0145 cent, or 1.3 percent, to $1.0955 per lb.

* “We keep failing the 20-day moving average, and we failed it again today,” onw U.S. trader said.

* September robusta coffee settled down $28, or 1.7 percent, to $1,652 a tonne. (Reporting by Ayenat Mersie in New York, Marcy Nicholson in Calgary and Ana Ionova in London; Editing by Kirsten Donovan and James Dalgleish)

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