Cocoa futures fell on speculation that Europe’s sagging economy will limit chocolate consumption. Sugar and orange juice also dropped. Coffee and cotton advanced.
“Poor margins and fears of weakening consumer demand” signal a drop of as much as 7 percent in European cocoa grinding in the second quarter, R.J. O’Brien said in a report. The dollar rose to a five-week high against a basket of currencies, eroding the appeal of some commodities as alternative assets.
“Worries about demand coming out of Europe and the stronger dollar are the biggest factors” driving cocoa lower, John Caruso, a senior broker at R.J. O’Brien in Chicago, said in a telephone interview.
Cocoa for September delivery declined 0.5 percent to settle at $2,307 a metric ton at 12:05 p.m. on ICE Futures in New York. The price has climbed 9.4 percent this year on concern that heavy rains in West Africa, the world’s top growing region, may curb output.
The European Cocoa Association will release grinding data on July 12, and the National Confectioners Association will publish North American figures on July 19.
Raw-sugar futures for October delivery fell 0.9 percent to 22.49 cents a pound on ICE, the first drop in three sessions. Earlier, the sweetener reached 23.05 cents, the highest for a most-active contract since April 13.
Orange-juice futures for September delivery slid 0.6 percent to $1.282 a pound, the first loss in five sessions.
Arabica-coffee futures for September delivery advanced 1.2 percent to $1.845 a pound, the second straight gain.
Prices have been supported as the weather phenomenon El Nino is bringing adverse weather to Brazil and Colombia, the world’s top producers of arabica beans, Societe Generale said today in an e-mailed report. “Initial production estimates continue to look optimistic with room for downgrades,” the bank said.
Also in New York, cotton futures for December delivery increased less than 0.1 percent to 70.72 cents a pound.
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