Cocoa Futures Fall as Grindings Miss Forecasts in Europe

Cocoa futures fell the most in a week as processors in Europe, the world’s top consuming region, reported slower growth in bean demand than analysts forecast. Sugar and orange juice advanced, while cotton was steady.

The European Cocoa Association said today that bean grinding rose 6.1 percent in the second quarter to 310,408 metric tons from 292,551 tons a year earlier, Analysts and traders expected an 8.3 percent increase, a Bloomberg survey showed. In a separate report, the German Confectionery Industry said processing dropped 11 percent in the period to 75,612 tons. Futures have dropped 18 percent from a 10-month high in September.

“Grinding markets missed expectations, and that is weighing on the market,” Sterling Smith, a futures trading specialist at Citigroup Inc. in Chicago, said in a telephone interview. “The German figures were noticeably lower, and that was troubling. Cocoa will see less growth in the future.”

Cocoa for September delivery slid 0.7 percent to close at $2,221 a ton at 12:21 p.m. on ICE Futures U.S. in New York, the biggest decline for a most-active contract since July 8.

Prices also fell on speculation that rain in Ivory Coast, the world’s biggest producer, “will lead to a favorable crop,” Smith said.

Parts of West Africa, including growing regions in Ivory Coast, Nigeria and Cameroon, had thunderstorms over the weekend, with daily rainfall ranging from 0.2 inch (0.5 centimeters) to 0.7 inch, according to AccuWeather Inc. Dry weather can hurt crop development.

Speculator Holdings

In the week ended July 9, hedge funds and other large speculators reduced wagers on a rally by 11 percent to 31,761 contracts from a week earlier, the lowest since April 23, U.S. Commodity Futures Trading Commission data showed on July 12. That marked the fourth straight decline.

Raw-sugar futures for October delivery rose 0.6 percent to 16.16 cents a pound on ICE, ending a three-session slump. On July 12 and today, the price touched 16.03 cents, the lowest since July 1, 2010. This year, the commodity dropped 17 percent.

Orange-juice futures for September delivery climbed 0.2 percent to $1.3945 a pound. Earlier, the price reached $1.404, the highest since June 25.

Cotton futures for December delivery gained less than 1 percent to 85.10 cents a pound. The price has climbed 13 percent this year.

Before it's here, it's on the Bloomberg Terminal.