Cocoa Declines on Signs of Ebbing Asian Demand; Sugar Advances

Cocoa declined for the first time in three sessions on signs of weaker demand after bean processing declined last quarter in Malaysia, the largest grinder in Asia. Sugar gained, while coffee, orange juice and cotton were little changed.

Cocoa grind fell 3.1 percent to 71,150 metric tons from a year earlier, the Malaysian Cocoa Board said today. Processing fell for a third straight quarter. The Standard and Poor’s GSCI Spot Index of 24 commodities declined for a second session as the U.S. government’s partial shutdown entered a third week and lawmakers have yet to reach an agreement on ending a fiscal impasse three days before the nation’s borrowing authority lapses.

“Lower Malaysian grinding is contributing to the negative” sentiment, John Caruso, a senior commodities broker at RJO Futures in Chicago wrote in an e-mail today. Prices are also declining as investors sell some riskier assets because of the deadlock in Washington, he said.

Cocoa for December delivery slid 1 percent to $2,718 a ton at 10:45 a.m. on ICE Futures U.S. in New York, after rallying 5.2 percent last week.

Cocoa’s 14-day relative strength index was at 70.2 on Oct. 11. A level above 70 is seen by some traders and analysts as a sign a security is overbought and poised for a decline.

Raw-sugar futures for March delivery added 0.5 percent to 19.02 cents a pound on ICE.

Arabica-coffee futures for December delivery rose less than 0.1 percent to $1.1675 a pound, while orange-juice futures for November delivery increased less than 0.1 percent to $1.265 a pound in New York. Cotton futures for December delivery gained 0.1 percent to 83.46 cents a pound.

To contact the reporter on this story: Luzi Ann Javier in New York at ljavier@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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