Cocoa prices rose on Wednesday after tapping multi-week lows, erasing most of the prior session’s steep losses as fund buying returned to the markets.
Reuters disclosed that Arabica coffee also inched higher. It revealed that July New York cocoa settled up $56, or 2.1per cent, at $2,730 per tonne, after falling to a one-month low at $2,629.
The trend-following fund buying provided a boost, traders said, causing prices to give up much of the prior session’s losses.
Also, July futures closed down 3.8 per cent on Tuesday, its biggest one-day fall in six weeks. Meanwhile, total open interest dropped just 416 lots to 305,050 lots, ICE data show. Tuesday’s sharp decline was thought to have signalled an end of this year’s strong run-up in prices, dealers said, but that may have been premature. It’s system (funds) that are defending today,” one U.S. trader said.
However, it revealed that July London cocoa settled up 25 pounds, or 1.3 percent, at 1,895 pounds per tonne, after dipping to a three-week low at 1,844 pounds.
Ivory Coast has sold 1.1 million tonnes of cocoa export contracts for 2018/19 and aims to sell between 1.3 million and 1.4 million tonnes, two senior Coffee and Cocoa Council sources told Reuters.