Cocoa futures stabilized Wednesday morning around 26-month highs as rains in top-growing region West Africa supported the market’s gains.
“Growing regions are expected to see some losses from the rains, and even those that aren’t expected to see losses are still under threat of infrastructure issues,” said Hector Galvan, senior broker at RJO Futures in Chicago.
Cocoa for March delivery on the ICE Futures U.S. exchange was recently 0.6% higher at $2,813 a ton, but holding below Tuesday’s 26-month intraday high of $2,820 a ton.
“We may get a correction, then try to go a little bit higher,” Mr. Galvan said. He sees $2,850 a ton as a near-term target for the market.
Global chocolate sales are expected to rise this year to 7.4 million metric tons, the highest since at least 2008, according to market-research firm Euromonitor.
And demand for cocoa beans, which are ground to make chocolate, is expected to outpace world supplies by as much as 70,000 metric tons in the 12 months that began Oct. 1, according to the International Cocoa Organization.
In other markets, orange juice for March delivery was 0.7% higher at $1.3780 a pound and raw sugar for March delivery was 0.2% higher at 17.68 cents a pound.
Taken from: The Wall Journal Street