Monday, March 21, 2011

Cocoa up on short-covering as Ivorian outlook murky

* Cocoa recovers as Ivorian fighting simmers

* Coffee climbs on tight global stocks

* Sugar slightly softer, looks for leads (Adds closing prices)

By Rene Pastor and David Brough

NEW YORK/LONDON, March 21 (Reuters) - Cocoa futures climbed on Monday on investor buying after last week's steep sell-off as traders mulled whether the virtual civil war in top cocoa grower Ivory Coast would be resolved, analysts said.

The softs complex continued to monitor the outbreak of fighting in Libya and the disaster in Japan.

Cocoa futures retained their firm tone because incumbent Laurent Gbagbo and rival presidential claimant Alassane Ouattara have been locked in a violent power struggle for control of a country that produces 40 percent of the world's cocoa beans. Cocoa exports have dried up as a result.

New York's May cocoa contract ended up $62 at $3,189 per tonne. On Friday, the contract slid $155, or 4.7 percent, to close at $3,127 per tonne.

London's Liffe May cocoa futures gained 47 pounds to end at 2,050 pounds per tonne. Last Friday, they fell 123 pounds or by 5.8 percent.

Volume in New York's cocoa futures stood at 15,800 lots, some 6 percent below the 39-day norm, Thomson Reuters preliminary data showed.

"The situation in Ivory Coast hasn't improved," said Sterling Smith, a senior analyst for brokers Country Hedging Inc in St. Paul, Minnesota.

Another broker said there may be discreet talks to convince Gbagbo to leave, although he was still recruiting fighters for his cause.

"We got a modest rebound, but not much more," a dealer said.

COFFEE FIRMER, SUGAR RETREATS

Coffee futures gained, with low global stocks contributing to the steadier tone in bean values.

Trade sources said a leading trade house was believed to be the major holder of exchange stocks while supplies from origin were proving hard to obtain.

In the London robusta market, May's premium over July remained firm at $165 a tonne, supported by short-covering, dealers said.

London robustas were supported by a lack of selling on the physical market.

"There's not a shortage, the coffee is in origin and there's still four to five weeks to ship it," a European trader said, referring to Vietnamese robusta beans.

London's May robusta futures rose $17 to finish at $2,613 a tonne. New York's May arabica coffee contract rose 0.80 cent to close at $2.77 a lb.

Sugar futures declined. New York's May raw sugar contract on ICE Futures U.S. shed 0.23 cent to close at 27.48 cents per lb. London's May white sugar futures fell $4.30 to end at $706.30 per tonne.

(Source: http://www.forexyard.com/en/news/SOFTS-Cocoa-up-on-short-covering-as-Ivorian-outlook-murky-2011-03-21T192041Z)

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