Aug. 19 (Bloomberg) -- Money managers’ bullish bets on cocoa traded in London reached a 10-month high as dry weather threatens to reduce the coming season’s crop in West Africa, the world’s biggest growing region.
The net-long position totaled 49,567 futures and options contracts as of Aug. 13, the Commitments of Traders report published today on the NYSE Liffe exchange’s website showed. That is the highest since Sept. 25 and compares with 46,601 contracts a week earlier. Cocoa for December delivery gained 2.6 percent in the period.
Rains last week remained mostly north of the cocoa belt in Ivory Coast and Ghana, the world’s two largest producers, MDA Weather Services in Gaithersburg, Maryland, said in a report e- mailed on Aug. 16. Dryness continues to stress the development of the next main cocoa crop, the forecaster said. The coming season in West Africa starts in October.
“There are still these supply concerns in West Africa due to weather issues,” Edward de Wismes, an agricultural-futures broker at Aurel BGC in Paris, said by e-mail today. “The long- only commodity funds have understood that the potential of profitability is more on cocoa and U.S. cotton than in any other agricultural products, and that’s why we have this position.”
In white, or refined, sugar, money managers boosted their net-long position to the highest since Oct. 16, NYSE Liffe data on Bloomberg showed. The net-long position totaled 9,405 futures and options in the latest week, from 7,762 contracts a week earlier. The sweetener rose 3.1 percent in the period.
“White-sugar demand must be even higher than we thought,” Robin Shaw, an analyst at futures and options brokerage Marex Spectron Group in London, said in a report e-mailed today. “White demand this year exceeded last year’s by some 2 to 3 million tons, or maybe more. Not enough of itself to change the market, but enough to turn 2014 from balanced-to-slight-surplus to balanced-to-slight-deficit.”
In robusta coffee, money managers’ net-short position, or bets on lower prices, more than doubled to 670 contracts from 276 lots a week earlier, the data showed. The beans used to make instant coffee and espresso rose 1.8 percent in the week.
In feed wheat, money managers reduced their net-short position to 522 contracts from 590 lots a week earlier. The grain fell 3 percent in the period.
--Editors: Dan Weeks, Sharon Lindores.