The cocoa market rose Wednesday, continuing a trend of volatile sideways trade.
Cocoa for December rose 1.9% to $2,009 a ton on the ICE Futures U.S. exchange, bouncing back into it's recent trading range following three sessions of declines.
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Cocoa prices collapsed late last year by about $1,000 a ton and have failed to recover as expectations for the 2016/2017 harvest in Ivory Coast and Ghana, the largest cocoa producers, are at a record. Favorable weather conditions aided the harvest, with the crop in Ivory Coast 27% higher year-on-year according to Commerzbank. The International Cocoa Organization estimated global production at a record 4.7 million tons.
"Investors remain skeptical" about the possibility of higher prices, according to Commerzbank. "There is not much to suggest a strong increase in cocoa prices in coming months," the firm said in a note. Cocoa consuming nations are expected to release quarterly data next month that will update traders about demand for cocoa. The "grindings" reports from Asia, Europe and North America, report on the tonnage of beans processed into semi-finished products and are used as a rough proxy for demand.
Traders have been anticipating a bump in demand due to lower prices, according to Price Futures Group. The National Confectioners Association is due to release the grinds report on Oct. 19 at 4 p.m. ET.
In other markets, raw sugar for March was down 0.4% at 13.86 cents a pound, arabica coffee for December lost 1.5% at $1.303 a pound, frozen concentrated orange juice for November was up 1.4% at $1.499 a pound and December cotton fell 0.2% to 68.63 cents a pound.
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(END) Dow Jones Newswires
September 27, 2017 11:41 ET (15:41 GMT)