Cocoa Rises Ahead of Demand Data

By Julie Wernau Features Dow Jones Newswires

Cocoa futures were higher Thursday ahead of key demand data out of North America for the main ingredient in chocolate.

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Cocoa for December was up 3.7% at $2,143 a ton on the ICE Futures U.S. exchange.

The National Confectioners Association is expected to announce the tonnage of cocoa beans processed in North American factories the third quarter at 4 p.m. ET today. The report, referred to as the grindings report by traders, is used as a proxy for demand for cocoa in North America, the second largest consumer of cocoa in the world.

"Traders hope for gain in the grind in North America and Asia after a very big European grind was reported last week," said Jack Scoville, vice president of Price Futures Group in Chicago.

European processing volumes of raw cocoa beans rose 3% in the third quarter year-over-year, slightly outperforming industry expectations, according to data released last week by the European Cocoa Association.

Cocoa grindings--the amount of raw cocoa processed into butter and powder for the manufacturing of confectionary and chocolate--ticked up to 353,544 metric tons of beans in the July-September period--a mild improvement on 2017's second quarter, the Brussels-based ECA said.

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J. Ganes Consulting LLC said in a note that for 2017-18 the markets can expect a drawdown in cocoa stocks due to strong demand following dive in prices for much of this year. But she said not to expect an immediate reduction in production coming out of Ivory Coast and Ghana

"The governments of the Ivory Coast and Ghana have been trying to enter into a formal agreement in attempt to manage supply to help to shore up prices. Normally these type pacts are ineffective and generally more disruptive than helpful," the firm said.

In other markets, raw sugar for March was up 0.2% at 14.11 cents a pound, arabica coffee for December rose 2.7 at $1.2765 a pound, frozen concentrated orange juice for December for up 1.9% at $1.532 a pound and December cotton was off 0.1% at 67.57 cents a pound.

Write to Julie Wernau at julie.wernau@wsj.com

(END) Dow Jones Newswires

October 19, 2017 12:13 ET (16:13 GMT)