Cocoa trades waived off after algo inspired spike

    * ICE exchange cancels trades in cocoa after spike

    * Sugar and cocoa retreat, coffee quietly mixed

Cocoa futures in the U.S. gyrated  violently Tuesday in suspected computer-generated dealings which prompted  the exchange to cancel some tr ades as traditional players complained of market distortion.

    Cocoa futures on ICE Futures U.S. sank $450 in 60 seconds before  rebounding a whopping $349 a minute, a striking move since the market had  hit 32-year highs Tuesday due to unrest in top producer Ivory Coast.   

    Soft commodity markets were largely weaker across the board, with cocoa  and raw sugar on the retreat while coffee was mixed in mostly slow  business.

    New York's May cocoa contract <CCK1> dropped $75 to close at $3,620 per  tonne, one day after posting the highest settlement close in 32 years.

    Liffe's May cocoa contract <LCCK1> shed 56 pounds to close at 2,325  pounds per tonne, well below the new contract peak of 2,389 pounds hit  during Tuesday's session.

    "We're consolidating. There's a dearth of news out there," said  Sterling Smith, a senior analyst for who covers a variety of commodity  markets for brokers Country Hedging Inc. in Minnesota.

    The cocoa market was underpinned by concerns that Ivory Coast, the  world's top cocoa producer, could edge into civil war, which could lead to  severe supply disruptions.

    The trade is particularly worried whether presidential claimant  Alassane Ouattara will extend a ban on cocoa exports he imposed from Jan.  24, a move that has been largely heeded by exporters. [ID:nLDE71L1S3]

    "Political events in the country have taken a turn for the worse," said  Abah Ofon, an analyst at Standard Chartered Bank.

    An export ban, sanctions against the country and bank closures have  limited the local industry's activity.  

    "Reports on the ground indicate that farmers are likely to abandon  their mid-season crop because of lack of access to finance for the  rehabilitation of their trees," Ofon said.

    "In our view, the bigger output risk will be on production prospects  for the 2011/12 main season crop, owing to the disruption of normal banking  activities, which will restrict pre-season financing," Ofon added.

     SUGAR AND COFFEE LOWER

    Sugar futures slipped as the trade digested delivery of 18,748 lots or  965,000 tonnes of raw sugar against the expired March raw sugar contract.  

    "I would hope that, with the market pulling back, this will stimulate  physical off-take," said Toby Cohen, a director of London-based trade house  Czarnikow.

    New York's May raw sugar contract <SBK1> fell 0.19 cent to conclude at  29.26 cents per lb and London's May white sugar futures <LSUc1> fell $10.40  to close at $733.40 per tonne.

    Sugar prices have fallen by around 20 percent since hitting a 30-year  high of 36.08 cents a lb on Feb. 2.      Czarnikow on Tuesday revised up its forecast for the 2010/11 global  sugar deficit to 3.7 million tonnes from its previous forecast of a deficit  of 2.8 million tonnes due to adverse weather in key producing countries.

    Coffee futures were steady to easier in light trade.      New York's May arabica coffee futures <KCK1> fell 2.40 cents to finish  at $2.693 per lb. London's May robusta coffee <LRCc.2> closed unchanged at

$2,384 per tonne. 

source: https://portal.hpd.global.reuters.com/site/applist.aspx

Cameroon Arabica Export Price Was 2,467 CFA Francs in Week

Cameroon’s arabica coffee price for export was 2,467 CFA francs ($5.18) in the week to Feb. 27, according to the country’s Cocoa and Coffee Board.

A “technical problem” in the Douala-based board’s office meant the figure was not provided for two months, General Manager Michael Ndoping said by phone today. The last figures available were an average export price of 2,125 francs in the week to Dec. 28.

Total production for 2010 was 3,500 metric tons, representing 6 percent of the country’s total coffee production, Ndoping said on Feb. 21. 

source: http://www.bloomberg.com/news/2011-02-28/cameroon-arabica-export-price-was-2-467-cfa-francs-in-week.html

Crop Forecast: Vietnam's 2011/2012 coffee output may drop-report-UPDATE 1

* Dry weather may hit 2011/2012 coffee yield

* Dry season peaking now

* Still early to assess weather damage -traders (Adds details)

Extensive dry weather in Vietnam's Central Highlands coffee belt may affect the country's 2011/2012 harvest, with output expected to fall, a state-run newspaper quoted a senior industry official as saying on Tuesday.

"Water shortages, drought and climate change would cause uneven flowering on coffee trees and thus strongly affect the yield," Luong Van Tu, chairman of the Vietnam Coffee and Cocoa Association, was quoted by the Nong Nghiep Vietnam newspaper as saying.

He said output from the next 2011/2012 crop year would fall "strongly", but gave no figures.

Tu could not be reached for comment on Tuesday.

Traders say output figures provided by the coffee association can be under-estimates aimed at inflating prices.

Last December the coffee association estimated the 2010/2011 crop at 15.75 million 60 kilogram bags, down from 17.5 million bags in the previous crop.

The figure was well below the 18.43 million bags estimated last month for the crop by the International Coffee Organization, of which Vietnam is a member.

The Vietnamese government does not provide official coffee production forecasts and traders instead must rely on estimates and data from other sources.

Forecasts of lower output from Vietnam, the world's largest producer of robusta beans, could contribute to rising global robusta prices, which has been gaining in recent months as roasters and funds switched their buying from the arabica market.

Last Tuesday, the New York May arabica contract peaked at $2.7840 per lb, the highest level for the second position since May 1977, and London May robusta touched a 2-1/2-year high at $2,417 a tonne.

Underground water sources in the central highland provinces of Daklak, Gia Lai and Kontum have dropped 3-4 metres (10-13 feet) from previous years, causing serious water shortages for growers, Tu was quoted by the Agriculture Ministry-run newspaper as saying.

Daklak is the country's largest coffee growing province, where water shortages strike every year.

Farmers in the Central Highlands comprising five provinces have now started the second phase of watering trees under the 2011/2012 season, the harvest for which is due to start from late October or early November.

Farmers normally water trees three to four times from February to early May when rains return to the region. 

Water supply is crucial to ensuring yield in March and April, when the annual dry season peaks.

But traders told Reuters it was now still early to assess any potential damage from the dry weather on the coffee crop.

"Water is sufficient for the first two phases, while we may have some shortages during the third watering phase," a grower in Daklak's district of Krong Buk said by telephone.

The third phase would take place in April. Vietnam's coffee crop year lasts between October and September, starting with a four-month harvest.
source: http://www.forexyard.com/en/news/Vietnams-2011/2012-coffee-output-may-drop-report-2011-03-01T034158Z-UPDATE-1

Produce Buying of Ghana Boosts Cocoa-Purchase Outlook By 13% for 2010-11

Produce Buying Co., Ghana’s biggest purchaser of cocoa from farmers, increased by 13 percent the amount of beans it wants to purchase this season, the second projection boost amid a strong harvest in the world’s second- largest grower.

The Accra-based company wants to buy 300,000 metric tons of beans during the 2010-11 main-crop harvest that began in October and will last until May, Joseph Osei Manu, director of finance and administration, said by phone today.

“The national harvest is really good this year, which I believe we owe to favorable weather for farmers,” he said.

The company earlier said it hoped to purchase 247,000 tons, then increased that projection to 265,000 tons, Manu said Jan. 7. In the 19 weeks of the season to Feb. 10, Produce Buying bought 260,000 tons, compared with 220,000 tons purchased in the entire October-to-June main crop of the 2009-10 season, he said.

The Ghana Cocoa Board, the state-controled industry regulator, increased its own projection for the 2010-11 season by 14 percent to 800,000 tons, citing good rains and the impact of programs to control diseases and increase fertilizer use, Tony Fofie, chief executive officer of the board, said Dec. 22.

Manu said Produce Buying may raise additional capital through “floating bonds or a rights issue” on the Ghana 

Stock Exchange this year in order to reduce the company’s reliance on borrowing from banks to have enough capital to buy the beans from farmers. He declined to say when it might happen. 

source: http://www.bloomberg.com/news/2011-02-28/produce-buying-of-ghana-boosts-cocoa-purchase-outlook-by-13-for-2010-11.html

Coffee and cocoa forecast for today & market cosing review 28 feb 2011

NEW YORK, Feb 28 (Reuters) - U.S. cocoa futures climbed to settle at  the highest level in 32 years on Monday, closing the month up 10 percent in  its biggest monthly gains in a year-and-a-half, as the conflict in top  grower Ivory Coast continued.

    Raw sugar finished strong for the third straight day. Arabica coffee  futures closed firm, remaining below last week's 34-year high and finishing  the month up for the ninth time in the past 10 months.

    RAW SUGAR

    * The most-active May raw sugar contract <SBK1> gained 0.71 cent or 2.5  percent to close at 29.45 cents per lb.

    * Second position <SBc2> finished the month down 6.5 percent, following  two straight months of gains.

    * March <SBH1> soared 0.99 cent to expire at 32.51 cents.

    * Brokers believe actual deliveries against the tape in March would  reach nearly 500,000 tonnes.

    * The market climbed after key May rebounded from the lows it hit last  week.

    * "I think the market should trade over 30 cents going forward. We are  also now waiting for the next crop from Brazil due out by the end of March  and early April," a dealer said.

        COFFEE

     * May arabica coffee futures <KCc2> gained 3.90 cents or 1.5 percent to  settle at $2.7170 per lb.

    * The contract finished the month up 10.2 percent, making the ninth  monthly gain in the past 10 months.

    * Market climbed in light dealings on speculative buying and a lack of  origin selling - traders.

   * Tight supplies continued to underpin prices, although the market was  viewed by some as overbought - traders.

    * Total open interest reached 123,088 lots on Feb. 25, the lowest level  since March 16, 2010 - ICE data.

    * March contract <KCH1> briefly moved to an intraday premium to May, indicating supply concerns, and closed up 4 cents at $2.7170 per lb, at par  to May - traders.

COCOA

    * Benchmark May cocoa futures <CCc2> jumped $56 or 1.5 percent to close  at $3,695 per tonne, the loftiest close since January 1979, after touching  a session high at $3,704.

    * Second position closed the month up 10 percent, the biggest monthly  surge since September 2009.

    * May premium to July <CCN1> closed at $61, narrowing from $66 on  Friday.

    * Total volume light at 8,959 lots, down 59 percent from the 30-day  average - preliminary Thomson Reuters data.

    * Market continued to climb on supply concerns as top grower Ivory  Coast appeared on the brink of civil war and an export ban prevented cocoa  from being shipped from ports - traders.

    * "Whoever's long, is staying long and whoever's looking for the short  isn't coming in." - Jimmy Tintle, analyst with Transworld Futures in  Florida.

    * The United Nations has accused Belarus of breaking an arms embargo  against Ivory Coast by delivering attack helicopters to Laurent Gbagbo, the  leader who has resisted three months of pressure to quit after a disputed  election. [ID:nLDE71R1LB]

    * Stocks of unexported cocoa sitting at ports in top grower Ivory Coast  reached 433,296 tonnes by Feb. 7. 

 source: https://portal.hpd.global.reuters.com/auth/login.aspx 

Specter of Ivorian war primes cocoa rally

    * Fears of civil war mount in top cocoa grower Ivory Coast

    * Sugar climbs, focus on deliveries in NY's March contract

    Cocoa futures in the   U.S. on Monday rocketed to a 32-year peak as gun battles in top  grower Ivory Coast inspired fears a civil war would severely        disrupt supplies from the beleaguered African nation.

    Gunfire flared near the center of the Ivorian capital of  Abidjan, inching closer to a full-blown civil war in a country  that supplies about 40 percent of the world's cocoa.

    New York's May cocoa contract <CCK1> gained $56 to finish  at $3,695 per tonne, the highest settlement close in 32 years.  The market rose 10 percent in February, its biggest monthly gain since September 2009.

    Cocoa went up for the third month in a row and the catalyst  for the surge is the turmoil in Ivory Coast.      Liffe's May cocoa contract added 13 pounds to close at  2,381 pounds per tonne, a few ticks below the lifetime top of  2,385 pounds.

    Open interest in the U.S. cocoa market, an indicator of  investor money flowing into bean futures, ballooned in January  and February to their loftiest levels in three years.

    "Whoever's long is staying long and whoever's looking for  the short isn't coming in," said Jimmy Tintle, analyst with  Transworld Futures in Tampa, Florida.

    The European Union has imposed sanctions on incumbent  Laurent Gbagbo along with the people and institutions helping  him stay in power after a November election he is widely  recognised to have lost to presidential claimant Alassane  Ouattara.

    The institutions include the cocoa authorities and ports.      A halt to cocoa-buying in Ivory Coast because of sanctions  and liquidity problems has spurred smuggling of cocoa through  neighbours like Ghana, farmers say, as the alternative is to  let the beans rot on farms.

    "At the moment, there's at least some movement of cocoa  across borders," a London-based broker said, adding this could  cease if civil war broke out.

    Exporters estimated only around 1,000 tonnes of beans were  delivered to the West African state's two ports between Feb. 22  and Feb. 27, down from 9,003 tonnes in the same week a year ago.       

source: https://portal.hpd.global.reuters.com/