April 5, 2018 / 6:13 PM / 9 months ago

SOFTS-New York cocoa climbs on arbitrage buying

 (Rewrites throughout, updates prices; adds comment, NEW YORK
    NEW YORK/LONDON, April 5 (Reuters) - New York cocoa futures
on ICE rose on Thursday, buoyed by arbitrage buying that sharply
narrowed the May/July spread while the London May cocoa discount
versus the July contract widened on the London market.
    * May New York cocoa        settled up $33, or 1.3 percent,
at $2,508 per tonne.
    * Despite the weaker British pound       , traders said
heavy arbitrage dealings that involved buying New York cocoa and
selling London, buoyed U.S. prices.  
    * This caused the May discount to July CCK8-N8 to narrow
to as much as $25 from $50 the prior session. Meanwhile the
London May discount to July LCCK8-H8 widened to as much as 40
pounds, the biggest for the contract.
    * New York cocoa has held a rare premium over London since
    * "A lot of people have this arbitrage on and it's hurting,"
one U.S. trader said, adding that it appeared someone was
"throwing in the towel."
    * May London cocoa         settled up 3 pounds, or 0.2
percent, at 1,728 pounds per tonne.
    * The markets shrugged off higher-than-expected bean
arrivals in top grower Ivory Coast and expectations the country
will produce a large crop.                          
    * May raw sugar        settled up 0.08 cent, or 0.7 percent,
at 12.35 cents per lb, edging up from last week's 2-1/2-year low
of 12.18 cents.
    * Dealers continued to keep a close watch on trade tensions
between the United States and China.
    * "One of the short-term potential bullish arguments is what
would happen in a larger 'risk-off' environment which prompts
speculators to reduce their positions," said James Liddiard of
consultancy Agrilion, noting speculators would then be buying to
cover a net short position.
    * August white sugar         settled up 40 cents, or 0.1
percent, at $343.60 per tonne.
    * The European Commission forecast on Thursday that white
sugar production in the EU would fall 3 percent in 2018-19 to
20.4 million tonnes, after a nearly 25 percent rise the previous
year when producers were encouraged by the end of quotas in the
    * May arabica coffee        settled up 0.65 cent, or 0.6
percent, at $1.1755 per lb, buoyed by funds rolling forward
short positions to the July        contract.
    * May robusta coffee         settled up $4, or 0.2 percent,
at $1,759 per tonne.
    * Vietnam, the world's top robusta producer, is expected to
export 100,000 to 140,000 tonnes (1.7 million to 2.3 million
60-kg bags) of coffee in April, traders said.             

 (Reporting by Marcy Nicholson in New York and Nigel Hunt in
London; editing by David Evans and James Dalgleish)
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