Bloomberg News

Cocoa Advances as Options Traders Bet on Rally; Coffee Retreats

July 08, 2013

Cocoa resumed gains in London as options traders boost bets on a price rally later this year, adding to speculation the next crop in West Africa, the main growing region, will be delayed. Coffee retreated.

The most active option for December gave holders the right to buy futures for that month at 1,550 pounds ($2,310) a metric tons, the so-called call options, NYSE Liffe data on Bloomberg showed. The return of dry weather after a large mid-crop and a lack of rains in April may make the harvest about a month later than usual, according to Kevin Marcus, founder of the commodity weather consulting company Marcus Weather in Passaic, New Jersey.

“It looked like we were on the road for a downside until a huge amount of December calls pushed the market back up fast and strong,” Jerome Jourquin, head of agricultural commodity derivatives at brokerage Aurel BGC in Paris, said by e-mail today. “The 1,550 pounds a ton area on December may be difficult to break to the upside as it’s a technical strong resistance.”

Cocoa for September delivery advanced 0.5 percent to 1,533 pounds a ton by 10:46 a.m. on NYSE Liffe in London, after sliding 0.4 percent in the past trading session. Cocoa for September delivery gained 0.3 percent to $2,211 a ton on ICE Futures U.S. in New York. It fell 1.2 percent on July 5.

Farmers in leading grower Ivory Coast are harvesting the mid-crop, the smaller of two annual harvests, and it’s estimated to be 440,000 tons, the third-biggest ever, the London-based International Cocoa Organization (ICCO) estimates. The main crop may be “a little bit late because of the strong mid-crop but nothing of concern at this stage,” Laurent Pipitone, head of the economics and statistics unit at the ICCO in London, said by phone last week.

Robusta coffee for September delivery fell 0.6 percent to $1,798 a ton in London. Arabica for delivery in September retreated 0.6 percent to $1.205 a pound on ICE.

White sugar for October delivery gained 0.2 percent to $473.70 a ton on NYSE Liffe. Raw sugar for delivery in October advanced 0.2 percent to 16.28 cents a pound on ICE.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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