Softs - Cocoa eases as traders lock in profits after prices soared; sugar down

Cocoa futures eased as traders locked in profits after prices soared recently on the Euronext Liffe, but a tight supply outlook for this year limited losses.
At 3.11 pm, cocoa for September delivery had dropped to 1,128 stg per tonne on the Euronext Liffe from 1,141 stg at the close on Friday. Cocoa hit a four-year high of 1,146 stg in intra-day trading on the same day.

`While profit-taking has pressured cocoa... the outlook for world supplies to remain tight amid rising demand and the bullish fundamental set-up should maintain the market up-trend,` said an analyst.

Fundamentally, the supply outlook looks tight and global demand could outpace supply for the year to September by 100,000-125,000 tonnes, said International Cocoa Organisation head Jan Vingerhoets. Fortis expects a 236,000-tonne deficit.

Although profit-taking is sending prices lower in the near term, the first analyst added, cocoa is still supported by fears violence in the Ivory Coast could escalate and disrupt the cocoa industry, after Prime Minister Guillaume Soro's plane was attacked with rockets just over a week ago.

Cocoa prices have gained 12 pct in five weeks.

Elsewhere, rains remained adequate in Ivory Coast, the world's top producer, which should boost the October-March crop. The current crop runs until September of this year.

Meanwhile, white sugar for October delivery on the Euronext Liffe was down at 311.50 usd from 312.00 usd on Friday, while Robusta coffee for September delivery was largely flat at 1,898 usd from 1,897 usd.

Source: sharewatch.com