Cocoa futures moved sharply higher as major chocolate companies reported better-than-expected earnings, ideas of greater demand.
Cocoa for September delivery rose 4.2%, to $1,992 a ton, on the ICE Futures U.S. exchange, on track for its highest close since June 16.
On Wednesday, Hershey Co. reported second-quarter profit rose 39%, beating analysts' estimates, and announced an increase in its quarterly dividend.
Tuesday, Lindt & Spruengli AG reported strong growth in sales in Europe, the world's largest consumer of chocolate. The firm said it saw high single-digit and double-digit increases in Austria and Spain and strong growth in Europe overall.
European processing volumes of raw cocoa beans rose 2.1% in the second quarter year-over-year, slightly outperforming industry expectations, according to data from the European Cocoa Association.
Peter Mooses, senior market strategist at RJO Futures in Chicago, said today's bump higher is being fueled by news that cooler, wetter weather in West Africa, the world's largest growing region, could affect the current crop.
Traders have been puzzled by recently delayed reactions to news in the cocoa market, he said, as earnings for Hershey came out yesterday.
"This is a combination of a possibility of a higher demand, lower production," he said.
Swiss food giant Nestle SA reported a slight dip in sales Thursday and recently put its U.S. candy business on the block to focus on its water and coffee segments.
In other markets, raw sugar for October was up 2.5%, at 14.59 cents a pound; arabica coffee for September rose 1%, to $1.362 a pound; frozen concentrated orange juice for September was up 0.2%, at $1.343 a pound; and December cotton jumped 1.7%, to 69.55 cents a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
July 27, 2017 10:31 ET (14:31 GMT)