Cocoa climbed to the highest in almost a week in London as a rising premium for September futures over December signaled concerns about supplies just as the weather is dry in top grower West Africa. Sugar rose.
Cocoa for delivery in September was 13 pounds a metric ton higher than the futures for December, reversing a discount just a month ago, exchange data showed. Earlier-dated contracts priced higher than later ones signal concerns about supply. Dryness is increasing in leading producers Ivory Coast and Ghana after some rain last month, WeatherBell Analytics LLC in New York said in a report e-mailed yesterday.
“We are in the ‘mini-dry’ season and the absence of rains over West Africa is not abnormal right now,” Eric Sivry, head of agriculture options brokerage at Marex Spectron Group in London, said in a report e-mailed today. “This ‘mini-dry’ started earlier than usual though. Any forthcoming rains should be seen as a ’bonus’ at this point in time.”
Cocoa for September delivery rose 0.1 percent to 1,573 pounds ($2,389) a ton by 11:27 a.m. in London. The price climbed to 1,587 pounds a ton, the highest for this contract since July 26. Cocoa for September delivery gained 0.1 percent to $2,300 a ton on ICE Futures U.S. in New York.
“The next four to six weeks will bring updates on pod counts and will clarify whether or not we may encounter supply side problems in the next four to six months,” Sivry said. The 2013-14 crop in West Africa is set to start in October.
Cocoa rose 7.7 percent in London and 2.9 percent in New York this year as speculators raised bets on higher prices. In London, money managers boosted bullish bets by 30 percent in the week end July 23 from the previous 7-day period, NYSE Liffe data showed. Cocoa may gain further to $2,400 a ton on ICE “if we do not see the needed rains,” Sterling Smith, a futures specialist at Citigroup Inc., said in a report e-mailed yesterday.
White sugar for October delivery was 0.4 percent higher at $492.80 a ton in London. Raw sugar for delivery in October rose 0.1 percent to 16.98 cents a pound in New York.
Robusta coffee for delivery in September was 0.3 percent lower at $1,868 a ton on NYSE Liffe. Arabica coffee for delivery in September fell 0.1 percent to $1.1845 a pound on ICE.
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