AP News

Cocoa surges 3 percent on hopes of better demand


The price of cocoa surged 3 percent as positive signs for the U.S. economy raised hopes that consumers may splurge on more chocolate.

Cocoa for December delivery rose $64 to finish Tuesday at $2,418 per metric ton.

The price has fallen about 10 percent since hitting a 2012 high of $2,691 per metric ton on Sept. 6. That's because supplies have been plentiful and demand has been poor.

Investors have been growing more optimistic because of recent positive economic data in the U.S. and a rising stock market. "Looking ahead, we're looking for demand to steadily increase," Vision Financial Group analyst Boyd Cruel said.

The Labor Department said consumer prices rose 0.6 percent last month in large part because of higher gasoline prices. Overall, prices have increased 2 percent in a 12-month period that ended in September.

In addition, the National Association of Home Builders said its survey of builder confidence rose in October to the highest level since June 2006. But factory production increased just 0.2 percent last month, according to the Federal Reserve.

Now, investors will watch closely to see how holiday retail chocolate sales shape up. Much will depend on stronger economic growth in the U.S. and Europe because chocolate is a luxury, not a must-have item like gasoline or basic food products, said Spencer Patton, founder and chief investment officer of Steel Vine Investments LLC.

In other trading, commodities were mixed as investors sorted through a batch of mostly positive U.S. economic data.

Metals prices were mostly higher. In December contracts, gold rose $8.70 to finish at $1,746.30 per ounce, silver increased 21.6 cents to $32.959 per ounce and December palladium gained $6.35 to $638.95 per ounce.

December copper essentially was unchanged, ending down 0.15 cent at $3.70 per pound. January platinum rose $12.90 to $1,645.20 per ounce.

Benchmark oil rose 24 cents to finish at $92.09 per barrel, heating oil fell 1.06 cents to $3.1985 per gallon, wholesale gasoline decreased 0.5 cent to $2.8453 per gallon and natural gas dropped 4.9 cents to $3.437 per 1,000 cubic feet.

In agricultural crop contracts, December wheat fell 0.5 cent to end at $8.4775 per bushel, December corn rose 1 cent to $7.3825 per bushel and November soybeans gained 1.25 cents to $14.9375 per bushel.


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