Cocoa Rises Ahead of Demand Data
October 19 2017 - 12:28PM
Dow Jones News
By Julie Wernau
Cocoa futures were higher Thursday ahead of key demand data out
of North America for the main ingredient in chocolate.
Cocoa for December was up 3.7% at $2,143 a ton on the ICE
Futures U.S. exchange.
The National Confectioners Association is expected to announce
the tonnage of cocoa beans processed in North American factories
the third quarter at 4 p.m. ET today. The report, referred to as
the grindings report by traders, is used as a proxy for demand for
cocoa in North America, the second largest consumer of cocoa in the
world.
"Traders hope for gain in the grind in North America and Asia
after a very big European grind was reported last week," said Jack
Scoville, vice president of Price Futures Group in Chicago.
European processing volumes of raw cocoa beans rose 3% in the
third quarter year-over-year, slightly outperforming industry
expectations, according to data released last week by the European
Cocoa Association.
Cocoa grindings--the amount of raw cocoa processed into butter
and powder for the manufacturing of confectionary and
chocolate--ticked up to 353,544 metric tons of beans in the
July-September period--a mild improvement on 2017's second quarter,
the Brussels-based ECA said.
J. Ganes Consulting LLC said in a note that for 2017-18 the
markets can expect a drawdown in cocoa stocks due to strong demand
following dive in prices for much of this year. But she said not to
expect an immediate reduction in production coming out of Ivory
Coast and Ghana
"The governments of the Ivory Coast and Ghana have been trying
to enter into a formal agreement in attempt to manage supply to
help to shore up prices. Normally these type pacts are ineffective
and generally more disruptive than helpful," the firm said.
In other markets, raw sugar for March was up 0.2% at 14.11 cents
a pound, arabica coffee for December rose 2.7 at $1.2765 a pound,
frozen concentrated orange juice for December for up 1.9% at $1.532
a pound and December cotton was off 0.1% at 67.57 cents a
pound.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
October 19, 2017 12:13 ET (16:13 GMT)
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