(Dec 22): Cocoa rebounded from the lowest in almost two weeks in New York, amid expectations of looming index-related buying and lingering uncertainty over supplies.
Futures gained as much as 2.7%, after earlier on Monday touching the lowest since Dec 9. Cocoa is being included in the Bloomberg Commodity Index, and Citigroup Inc has projected that the rebalancing will lure as much as US$2 billion of buying in the first days of January. Peak Trading Research estimates it could lead to purchases of about 31,190 contracts.
Cocoa futures are among the most oversold agricultural markets, according to Peak Trading Research founder Dave Whitcomb, making them vulnerable to a rebound. Prices have roughly halved this year on expectation of a surplus, though some analysts recently trimmed their forecasts for the oversupply.
Traders are keeping an eye on signs of how big the current harvest is in West Africa — including using weekly bean arrivals at ports for export from top grower Ivory Coast to gauge supply. Arrivals are running at about the same pace as last season.
While cocoa prices have dropped from a record high set a year ago, they remain historically high — and chocolate isn’t expected to get much cheaper any time soon.
See also: Wheat rises as Black Sea attacks add to concerns over crop exports
Prices:
- Cocoa futures rose 1.2% to US$5,912 a tonne in New York. London cocoa was up 0.4%.
- In other soft commodities, raw sugar gained 1.2%. Arabica coffee added 1.1%.
Uploaded by Felyx Teoh
