Cocoa Futures Rise to Two-Year High on Supply Concerns

Cocoa futures rose to the highest in more than two years as U.S. inventories declined amid signs of increasing demand. Cotton also gained, while sugar, orange juice and coffee dropped.

Stockpiles of cocoa monitored by ICE Futures U.S. have tumbled 19 percent since the end of May and are the lowest since February. Prices are up 23 percent this year. The North America grind, a measure of demand, may have climbed 6 percent to 10 percent in the third quarter, according to Marex Spectron Group. That exceeds the 5.1 percent gain forecast by traders in a Bloomberg survey. The National Confectioners Association will release the data on Oct. 17.

“The persistent stockpile decline and the grinding data show a confluence of bullish events,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “This is a bull market that’s probably going to go higher.”

Cocoa for December delivery jumped 1.7 percent to settle at $2,760 a metric ton at 11:58 a.m. on ICE in New York. Earlier, the price reached $2,770, the highest for a most-active contract since Sept. 19, 2011.

Cotton futures for December delivery advanced 0.1 percent to 83.71 cents a pound.

Raw-sugar futures for March delivery tumbled 1.8 percent to 18.7 cents a pound, the biggest drop since Sept. 27.

India, the world’s second-biggest producer, may have sold 100,000 tons to at least two companies, James Cassidy, the head of the trading desk at Newedge Group in New York, said in a report.

“When you see supplies like these hitting the market, prices tend to pull back,” Smith of T&K said. Brazil is the top grower.

Orange-juice futures for November delivery sank 1.6 percent to $1.2385 a pound. The price fell for the fifth straight session, the longest slump in two months, as U.S. retail sales dropped.

Arabica-coffee futures for December delivery slid 0.5 percent to $1.1645 a pound.

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