Cocoa prices surged Monday in the first day of trading following Emmanuel Macron's victory over anti-euro candidate Marine Le Pen in Sunday's French presidential election.
Cocoa for July delivery rose 4.2% to $1,944 a ton on the ICE Futures U.S. exchange, on track to end at a nearly on-month high.
Continue Reading Below
Investors drove the euro to a seven-month high against the dollar after Mr. Macron's victory. Europe is the largest consuming region for cocoa and a stronger euro against the dollar can help lure buyers to the cocoa market to take advantage of relatively cheaper prices.
Heavy showers in West Africa have helped push prices higher as traders talk up the idea that beans could get stuck on washed out roads in their attempt to be transported to ports. West Africa is the world's largest growing region for cocoa.
At the same time, a report from the Commodity Futures Trading Commission on Friday showed that speculators are continuing to add to their short bets in the cocoa market, with the bears outweighing the bulls by 48,000 contracts as of last Tuesday, a multi-year high. That has some traders thinking the contract is "oversold," said Peter Mooses, senior market strategist at RJO Futures.
"These big downside or upside moves in cocoa have been short-lived," Mr. Mooses said. "For today, the currency trade, the election, the weather affecting Africa are helping this move."
In other markets, raw sugar for July was up 1.1% at 15.48 cents a pound, arabica coffee for July rose 0.5% to $1.3635 a pound, frozen concentrated orange juice for July lost 0.5% to $.14565 a pound and July cotton was off 0.3% at 77.52 cents a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
May 08, 2017 11:27 ET (15:27 GMT)