July 8, 2019 / 12:20 PM / 3 months ago

SOFTS-Cocoa hits year high on technical buying, worries over floor price

(Updates prices)

LONDON, July 8 (Reuters) - London cocoa prices on ICE hit a one-year high on Monday as low volumes exaggerated a technically driven rally and as concerns persisted about plans by Ivory Coast and Ghana to introduce a floor price for cocoa sales.


* September London cocoa rose 55 pounds, or 3%, to 1,894 pounds per tonne at 1201 GMT, its highest since last year May. Prices rose 2.6% last week.

* Top producers Ivory Coast and Ghana failed last Wednesday to come to an agreement with the chocolate industry on how to introduce a cocoa floor price, leaving dealers uncertain on future pricing.

* There are also concerns about dry weather in top grower Ivory Coast.

* “Markets don’t have lots of volume and can easily be pushed around. Lot’s of people don’t want to commit, they’d rather wait,” said a dealer. He added that the floor price plan was bullish, especially with industry cover said to be limited.

* September New York cocoa rose $60, or 2.4%, to $2,522 per tonne, after rising 1.6% last week.


* September arabica coffee was down 2.30 cents, or 2%, to $1.0875 per lb, having plunged more than 5 percent to 1.0530 earlier. The contract peaked at a seven-month high on Friday, clocking up its third positive weekly finish in a row.

* Dealers were weighing up cold, potentially frost-inducing weather in top-grower Brazil over the weekend against predictions that the frost may not cause much crop damage.

* The weakening in Brazil’s real versus the dollar was also pressuring prices. A weak real encourages producer selling of dollar-priced coffee.

* September robusta coffee fell $9, or 0.6%, to $1,435 per tonne, having hit a three-month peak on Friday.


* October raw sugar was up 0.02 cents, or 0.2%, at 12.38 cents per lb, after rising 0.3% last week, its fourth positive weekly finish in five weeks.

* The market continues to keep a close watch on India’s monsoon, with rainfall beginning to pick up but concerns persisting that it will be weaker than normal this year, which could curb sugar production.

* “Sugar continues to discount weather-related production threats, and the looming transition to a modest world market deficit in 2019/20 in our view,” JPMorgan said in a note.

* August white sugar rose $0.30, or 0.1%, to $320.10 per tonne. (Reporting Maytaal Angel; editing by David Evans)

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