LONDON, March 14 (Reuters) - New York cocoa rose to a 16-month high on Wednesday on fund buying against the backdrop of diminished outlooks for crops in both Ivory Coast and Ghana while London cocoa climbed to a 13-month peak.
* May New York cocoa was up $38, or 1.5 percent, at $2,570 a tonne at 1234 GMT after rising to a peak of $2,581, the highest for the second position since Nov. 2016.
* May London cocoa was up 26 pounds, or 1.5 percent, at 1,802 pounds a tonne after setting a 13-month high of 1,804 pounds.
* Dealers noted the March London contract expired on Wednesday at a premium over May.
* The spot futures contract has become increasingly attractive recently as a scarcity of quality West African beans in Europe has dramatically widened differentials on the physical market.
* “Clearly we’ve had a sharp slowdown in Ivory Coast arrival numbers over the last couple of weeks - and very strong bean differentials,” said one dealer.
* However, open interest in the March contract decreased sharply by 12,138 lots to just 8,418 lots as of March 13.
* Dealers noted they still expected a moderate expiry, but the drop off signalled reluctance to take delivery due to lingering worries about receiving old or poor-quality cocoa from Cameroon.
* “People have clearly now decided that this does represent relatively good value,” the dealer said. “But it’s only for a narrow market.”
* May raw sugar was up 0.02 cent, or 0.2 percent, at 12.64 cents per lb.
* The front month fell to 12.53 cents on Tuesday, equalling a low set in June 2017. A break below that level would take prices down to their weakest level since Feb. 2016.
* “We suspect that old low will not prove to offer any more than modest resistance so new lows are probably coming,” Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
* Dealers said rising production in India and Thailand was keeping the market on the defensive although a decline in output in Brazil should limit an expected build up in stocks.
* May white sugar rose $0.70, or 0.2 percent, to $354.40 per tonne.
* May arabica coffee was up 0.25 cent, or 0.2 percent, at $1.2180 per lb.
* May robusta coffee was down $1, or 0.1 percent, at $1,762 a tonne. (Reporting by Nigel Hunt and Ana Ionova; Editing by Elaine Hardcastle)