Cocoa climbs as inventories slump to 10-month low

December cocoa advanced 3.1%

Cocoa gained the most in four weeks as reserves at warehouses monitored by ICE Futures U.S. dropped to a 10-month low. Coffee fell to the lowest since 2008. Sugar also slid, while orange juice advanced and cotton was steady.

Inventories fell today for a 49th straight session to the lowest since December. The Indonesia Cocoa Association said shipments from Sulawesi provinces, the nation’s main growing area, plunged 49 percent to 5,280 metric tons in October from a month earlier.

“The drop in exports out of Sulawesi is most likely making the bulls very nervous,” Michael Smith, the president of T&K Futures & Options Inc. in Port St. Lucie, Florida, wrote in an e-mail. “As local grinders increase their hoarding, it artificially pushes prices over the near term, but at some point, this supply will hit the market and most likely pressure to the downside.”

Cocoa futures for December delivery advanced 3.1 percent to settle at $2,736 a ton at 12:03 p.m. on ICE in New York, the biggest gain since for a most-active contract since Oct. 7.

Excessive rain in the past month threatens to spur crop disease and pests in northern Sumatra, according to Commodity Weather Group in Bethesda, Maryland. Ivory Coast is the world’s biggest cocoa producer, followed by Ghana and Indonesia.

Arabica-coffee futures for December delivery slipped 0.2 percent to $1.0345 a pound in New York, after touching $1.0285, the lowest since December 2008.

Raw-sugar futures for March delivery slid 0.3 percent to 18.26 cents a pound.

Orange-juice futures for January delivery gained 2.3 percent to $1.233 a pound.

Cotton futures for December delivery fell less than 0.1 percent to 75.94 cents a pound on ICE. The price dropped for the 13th straight session, the longest slump since at least 1961.

www.bloomberg.com

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