March 7, 2020 / 12:15 AM / 3 months ago

SOFTS-Cocoa hits near two-month low, raw sugar plumbs three-month trough

(Updates with settlement prices)

NEW YORK/LONDON, March 6 (Reuters) - Cocoa futures fell to their lowest level in nearly two months on Friday, pressured by a potential weakening in demand partly linked to the global spread of the coronavirus, while raw sugar slid to a three-month low.


* May New York cocoa ​​settled down $36, or 1.4%, to $2,561 a tonne, its lowest level since early January.

* Dealers noted concerns that demand could weaken both because of the spread of the coronavirus in Europe, the most important consuming region for chocolate, and potential price rises linked to the inclusion of a Living Income Differential (LID in sales of cocoa from Ivory Coast and Ghana.

* Chocolate maker Lindt warned this week that price increases were inevitable because of the LID, not only for the company but for the industry as a whole.

* The International Cocoa Organization is scheduled to release its first forecast for the global balance in 2019/20 on Friday.

* A Reuters poll in late January gave a median forecast for a deficit 70,000 tonnes.

* “Though a small supply deficit has been assumed by market participants so far, weaker demand could quickly turn this into a surplus,” Commerzbank said in a note.

* May New York cocoa has fallen below its previous level of support at $2,568 a tonne, which could cause a fall to $2,481, said Reuters technical analyst Wang Tao.

* May London cocoa ​​settled down 12 pounds, or 0.6%, to 1,886 pounds per tonne​.


* May raw sugar ​​settled down 40 cents, or 3%, at 13.02 cents per lb​​, after hitting a three-month low of 12.95 cents.

* Dealers noted that gains during the market’s strong rally in January and February, when the May contract climbed from a 2020 low of 13.20 cents on Jan. 2 to a peak of 15.29 cents, had been erased as funds liquidated long positions.

* “The Coronavirus threat continues to snowball and drag us lower. However, the spreads seem to be indicating (tightening supply),” Sucden Financial said in a note.

* May white sugar settled down $9.70, or 2.6%, at $370.30 per tonne, having hit its lowest level since early January at $369.50.


* May arabica coffee settled down 3.95 cents, or 3.5%, at $1.0740 per lb, having touched its lowest level in a week at $1.0680.

* Dealers said the market remains underpinned by tightening supplies, with exchange stocks falling this week..

* May robusta coffee settled down $29, or 2.3%, at $1,245 a tonne, having hit its lowest since mid-October at $1,215. (Reporting by Nigel Hunt, Maytaal Angel and Jessica Resnick-Ault Editing by David Goodman and Leslie Adler)

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