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Cocoa Futures Rise as Asia Processing Unexpectedly Climbs

July 17 (Bloomberg) -- Cocoa rose to a four-week high as bean processing in Asia unexpectedly increased in the second quarter, signaling higher demand for the chocolate ingredient. Coffee, orange juice and sugar advanced, while cotton fell.

The Singapore-based Cocoa Association of Asia said today that processing rose 2 percent to 153,792 metric tons from a year earlier. Analysts and traders expected a decrease. Grindings in the first quarter were revised up to 153,932 tons to take into account new members of the organization, the group said. The European Cocoa Association said on July 15 that grindings rose 6.1 percent in the second quarter.

“What’s driving this market now is the supply-and-demand news,” Boyd Cruel, a senior analyst at Vision Financial Markets in Chicago, said in a telephone interview. “It’s moving because of this morning’s report on processing in Asia.”

Cocoa for September delivery increased 0.5 percent to close at $2,300 a metric ton at 12:05 p.m. on ICE Futures U.S. in New York. Earlier, the price reached $2,327, the highest for a most-active contract since June 13. Yesterday, the commodity jumped 3.1 percent, the most since Sept. 5.

Dry weather in the Ivory Coast, the world’s top producer, is also driving prices higher, Cruel said. The country is entering its “mini dry season”, according to David Streit, a meteorologist from Commodity Weather Group in Bethesda, Maryland.

Rain Shortfall

Most rainfall will be north of crop regions over the next week, and growers are faced with a moisture deficit because of low precipitation in the past few weeks, Streit said. Temperatures may be as high as 92 degrees Fahrenheit (33 Celsius).

Exports from the Ivorian port of San Pedro tumbled 37 percent in June to 26,921 tons from a year earlier, according to harbor data today.

North American processing figures will be released at 4 p.m. tomorrow from the Washington-based National Confectioners Association.

Arabica-coffee for September delivery climbed 1.6 percent to settle at $1.2795 a pound on ICE. Earlier, the price reached $1.292, the highest since June 12.

Orange-juice futures for September delivery rose 1.5 percent to $1.448 a pound, the fourth straight increase, after touching $1.451, the highest since June 20.

Raw-sugar futures for October delivery gained 0.5 percent to close at 16.08 cents a pound. Yesterday, the price touched a three-year low of 15.93 cents. The commodity slumped 18 percent this year.

Cotton futures for December delivery dropped 0.8 percent to settle at 83.67 cents a pound in New York.

To contact the reporter on this story: Marley DelDuchetto Kayden in Chicago at mdelduchett2@bloomberg.net

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

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