Bloomberg News

Cocoa Falls as Grindings Miss Forecasts in Europe; Coffee Gains

July 15, 2013

Cocoa futures fell the most in a week after processors in Europe, the biggest consuming region, reported slower growth in bean demand than analysts forecast. Coffee and sugar advanced, while cotton fell. Orange juice was little changed.

Grinding of cocoa beans rose 6.1 percent in the second quarter to 310,408 metric tons from 292,551 tons a year earlier, the European Cocoa Association said today. 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. Prices are down 18 percent since reaching 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 0.6 percent to $2,222 a ton at 10:32 a.m. on ICE Futures U.S. in New York, heading for the biggest decline 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 cocoa growing regions of Ivory Coast, Nigeria and Cameroon, had thunderstorms over the weekend, with daily rainfall ranging from 0.2 inches (0.5 centimeters) to 0.7 inches, through yesterday, according to AccuWeather Inc. Dry weather can hurt crop development.

Speculator Holdings

Hedge funds and other large speculators decreased their net-long positions, or bets prices will rise, by 11 percent in the week ended July 9 to 31,761 contracts, according to U.S. Commodity Futures Trading Commission data. That’s the fourth straight decline and the least-bullish since April 23.

Arabica-coffee futures for September delivery advanced 2.2 percent to $1.22 a pound on ICE.

Raw-sugar futures for October delivery rose 0.4 percent to 16.12 cents a pound, heading for the first gain in four sessions. The price touched 16.03 cents on July 12, the lowest since July 1, 2010. This year, the commodity dropped 18 percent through last week.

Cotton futures for December delivery declined 0.3 percent to 84.84 cents a pound. The price climbed 13 percent this year through last week.

Orange-juice futures for September delivery was up less than 0.1 percent at $1.3925 a pound, after fluctuating between gains and losses.

To contact the reporter on this story: Marley DelDuchetto Kayden in Chicago at mdelduchett2@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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