Cocoa Market
On Monday, New York cocoa futures on ICE took a significant hit, dropping over 10% as speculators liquidated portions of their long positions.
September New York cocoa (CCc2) concluded the session down by $985, or 11.1%, settling at $7,920 per metric ton. This follows an 8% decline last week.
Similarly, September London cocoa (LCCc2) decreased by 9.6%, landing at 6,617 pounds per ton, after a 9% drop the previous week.
Market analysts attributed the decline to speculators liquidating positions following last week’s poor performance. A U.S.-based broker noted, “Breaking below the 20-day and 50-day moving averages likely triggered profit-taking in a thin market.”
Despite the market activity, fundamentals remain strong. “The market is extremely tight, leading to the lowest stock-to-consumption ratio at the end of the current season that we have ever seen,” commented another broker.
Uncertainty persists regarding the 2024/25 crop outlook in West Africa, with pod-counting surveys currently underway. Poor harvests in Ivory Coast and Ghana this season suggest the market will start the next season with very low stocks, highlighting the importance of the upcoming harvests.
Coffee Market
In contrast, coffee futures saw significant gains. September robusta coffee (LRCc2) surged by 3.6% to $4,252 per ton, nearing the record peak of $4,394 set earlier this month.
Export volumes from Vietnam, the top robusta producer, are notably lower than last year’s levels so far this month, following a significant year-on-year drop in May. This decline is attributed to the worst drought in nearly a decade affecting Vietnamese coffee growers.
Additional supply constraints are arising from shipping delays in Brazil, which are limiting the flow of conillon (robusta) coffee, tightening supplies in key consuming countries.
September arabica coffee (KCc2) also saw a substantial rise, increasing by 5% to $2.3625 per pound.
Sugar Market
In the sugar market, July raw sugar (SBc1) increased by 0.44 cents, or 2.3%, closing at 19.41 cents per pound.
Tereos, a leading sugar producer, anticipates crushing a similar amount of sugarcane in Brazil for the 2024/25 harvest as the previous cycle, despite a drought in key production areas, an executive announced on Monday.
August white sugar (LSUc1) climbed 2.1%, reaching $570.10 per ton.