July 14, 2017 / 12:42 PM / in 4 months

SOFTS-Cocoa climbs as demand picks up, white sugar up ahead of expiry

LONDON, July 14 (Reuters) - New York cocoa futures on ICE rose on Friday, extending gains as firmer technicals and signs of improving physical demand bolstered sentiment, while white sugar and arabica coffee also climbed.


* September New York cocoa was up $16, or 0.85 percent, at $1,888 a tonne by 1221 GMT, after closing 2.8 percent higher in the previous session.

* This improved the technical structure of the market and inspired further short covering, dealers said.

* September London cocoa rose 3 pounds, or 0.20 percent, to 1,495 pounds a tonne, holding most of the previous session’s gains even as a stronger British pound capped the upside.

* The premium on the front-month July contract to the October position widened, with dealers closely monitoring the spread ahead of expiry on Friday.

* “It probably reflects the uptick in demand for cocoa,” Edward George, head of group research at Ecobank, said. “Grinders have got to replenish their stocks and they feel there is sufficient support for demand going forward.”

* Market participants were also monitoring weather in top grower Ivory Coast, where recent heavy rains have lent some support.


* August white sugar climbed $3.40, or 0.81 percent, to $421.60 a tonne ahead of a contract expiry on Friday.

* Prices have been supported in the last few weeks by worries about tighter nearby supplies, especially from Central America.

* Dealers said sugar could potentially be delivered from refineries in Thailand, the United Arab Emirates, Algeria and possibly India.

* October raw sugar eased 0.10 cents, or 0.71 percent, to 14.04 cents per lb, giving up some of the previous day’s gains.

* Prices surged 4.8 percent in the prior session after Brazil’s Petrobras raised gasoline prices.

* A price hike typically lifts the ethanol parity floor, boosting its appeal over sugar. However, participants noted the move does not necessarily make ethanol the best option for Brazilian mills.

* “Sugar needs to be nearer 13 cents, and probably substantially lower, for that to be the case,” said Toby Gorey of Commonwealth Bank of Australia.


* September arabica coffee rose 1.50 cent, or 1.14 percent, to $1.327 per lb, extending gains from the previous session.

* A stronger Brazilian real lent support, since it typically dampens returns from dollar-denominated commodities such as sugar and makes it less attractive for producers to sell.

* September robusta coffee was up $12, or 0.56 percent, at $2,157 per tonne. (Reporting by Ana Ionova; editing by Susan Thomas)

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