Cocoa hits multi-month highs, sugar at 6-week low

Monday, 13 August 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Cocoa futures inched up to multi-month highs last week, supported by the threat of El Nino weather conditions on the West African crop and chart-based buying, while raw sugar closed at a six-week low.

Coffee eased with some pressure coming from the firm U.S. dollar.

Liffe cocoa prices rose slightly to a nine-month high of 1,675 pounds per ton ($2,600) earlier in the day. The market last week broke above the range of 1,367 to 1,621 pounds that had persisted for over six months, indicating bullish technicals on historical price charts.

Both Liffe and ICE cocoa markets have continued to rise after recently breaking above their 200-day moving averages. They are technically at overbought levels on the 14-day relative strength index charts.

Liffe December cocoa futures closed up 12 pounds, or 0.7%, at 1,670 pounds per ton. ICE December cocoa futures finished up $19, or 0.8%, at $2,469 a ton, their highest settlement for the second position since January.

The potential for weather phenomenon El Nino to strike later in the year also underpinned prices.

Raw sugar futures hit another five-week low, moving lower for the seventh straight session, as weather forecasts pointed to favorable weather for top producer Brazil’s ongoing cane crush.

Benchmark October sugar futures on ICE fell 0.33 cent, or 1.5%, to close at 21.09 cents a lb, the lowest settlement for the spot contract since June 26.

Raw sugar prices have been trading between 19 and 24 cents over the past two months, extending their losses after falling below the 200-day moving average last week and below the 50% Fibonacci retracement level on Tuesday. October raw sugar futures dropped to a session low at 21.05 cents, the 61.8% Fibonacci retracement.

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