Cocoa fell for a third day in London on speculation investors betting on higher prices will sell as rain returns to West Africa, the world’s top growing region, easing concern about dryness. Robusta coffee slid.
Scattered thunderstorms from Ivory Coast to Nigeria and Cameroon were forecast to total 0.2 to 0.7 of an inch daily from Aug. 30 to Sept. 1, AccuWeather said in a report on Aug. 30. Some areas could get as much as 2 inches, it said. Money managers held their biggest bet on higher New York cocoa prices in 5 1/2 years in the week ended Aug. 27, U.S. Commodity Futures Trading Commission data compiled by Bloomberg show.
“Rain expectation in West Africa resulted in some merchants and speculators selling the December futures,” Edward de Wismes, an agricultural futures broker at Aurel BGC in Paris, said by e-mail today. “The market is really illiquid today, with the U.S. closed, so London cocoa is just following the trend initiated in the past trading session.”
Cocoa for delivery in December fell 0.9 percent to settle at 1,619 pounds ($2,515) a metric ton on NYSE Liffe in London. ICE Futures U.S., where arabica coffee, raw sugar and dollar-denominated cocoa trade, is closed for Labor Day.
Money managers boosted bets on higher cocoa prices in New York to 58,236 contracts by Aug. 27, the most since February 2008, CFTC data showed. In London, investors reduced bets on rising cocoa prices by 72 futures and options in the period. The net-long position amounted to 54,310 futures and options as of Aug. 27 from 54,382 contracts a week earlier, data from the NYSE Liffe exchange published today showed.
Speculators’ positions are “high enough,” Eric Sivry, head of agricultural options brokerage at Marex Spectron in London, said by e-mail before the release of the London data today. The long position, combined with the return of rains in West Africa, “is helping push the market lower,” he said.
Robusta coffee for November delivery declined 1.2 percent to $1,758 a ton on NYSE Liffe. White sugar for delivery in October declined 10 cents to $477.80 a ton in London.