Cocoa Falls as Investors May Sell on African Rains; Coffee Drops

Cocoa declined in London for a third day on speculation money managers may be holding record bets on rising prices, leaving the market ripe for a selloff just as rains return to West Africa. Robusta coffee retreated.

Money managers held the biggest bets on higher prices in 5 1/2 years in the week ended Aug. 27, U.S. Commodity Futures Trading Commission data compiled by Bloomberg show. In London, NYSE Liffe will report investor holdings later today. West Africa was forecast to get rain this weekend, potentially easing dryness that threatened to reduce the crop.

“Speculators are very long and whether their combined position in London and New York will be a fresh record or not, it does not really matter,” Eric Sivry, head of agricultural options brokerage at Marex Spectron in London, said by e-mail today. “Their position will probably be near the previous number, which is high enough. This combined with returning rain in West Africa is helping push the market lower.”

Cocoa for delivery in December slid 0.9 percent to 1,621 pounds ($2,526) a metric ton by 11:14 a.m. on NYSE Liffe in London. ICE Futures U.S., where arabica coffee, raw sugar and dollar-denominated cocoa trade, is closed today for the Labor Day holiday.

Investors were net-long 54,382 futures and options in London in the week ended Aug. 20, the most since September 2012, NYSE Liffe data showed. In New York, money managers boosted their bets on higher prices in New York to 58,236 futures and options contracts by Aug. 27, the most since February 2008, CFTC data showed. Cocoa areas in top producers Ivory Coast and Ghana were set to get the most rain since June this weekend, Commodity Weather Group Inc., in Bethesda, Maryland, said on Aug. 29.

Robusta coffee for November delivery declined 0.5 percent to $1,770 a ton on NYSE Liffe. White sugar for delivery in October rose 0.2 percent to $479 a ton in London.

To contact the reporters on this story: Alex Pashley in London at apashley@bloomberg.net; Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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