Cocoa Caps Biggest Weekly Decline Since January; Cotton SlidesIsis Almeida and Marvin G. Perez
Cocoa posted the biggest weekly loss since January on signs of an improving supply outlook. Cotton, coffee and and sugar fell.
Global cocoa production will outpace consumption by 11,000 metric tons in the season ending Sept. 30, Macquarie Group Ltd. said on May 3. That reverses a previous forecast for a shortage as abundant rainfall and good sunshine improved the outlook for the smaller of two annual harvests, known as the mid-crop in West Africa, the top growing region, the bank said. Prices rose 9.1 percent in April.
“An overdue correction looks to be beginning,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “The market does look poised to at least test support at the $2,300-a-ton area.”
Cocoa for July delivery dropped 2.1 percent to settle at $2,300 a ton at 11:55 a.m. on ICE Futures U.S. in New York. This week, the price tumbled 4.8 percent, the most since Jan. 25.
Cotton futures for July delivery fell 1.6 percent to 86.48 cents a pound on ICE.
Today, the U.S. Department of Agriculture issued its first estimate for world cotton supply and demand for the season starting Aug. 1. Output in the U.S., the biggest exporter, will drop 19 percent from a year earlier as farmers shift to other crops. Global ending inventories will climb 9.4 percent to a record, with most of the gain accounted by China, the biggest user, curbing the nation’s import needs, the data show.
“At first blush, the world balance sheet is bearish, if not very bearish, with carry-out up,” Sharon Johnson, a senior market specialist with Knight Futures in Roswell, Georgia, said in an e-mail.
Arabica-coffee futures for July delivery slid 2.3 percent to $1.4445 a pound in New York, paring the weekly gain to 2.5 percent. Yesterday, the price reached the highest since Feb. 1 after a weakening cold front in Brazil, the biggest shipper, pushed temperatures close to damaging-frost levels in some areas.
Raw-sugar futures for delivery in July declined 0.2 percent to 17.43 cents a pound.