Cocoa plummets in New York and records biggest daily drop in almost 50 years | Quotes

In a moment that could be considered rare, cocoa once again closed the session on the New York Stock Exchange with falling prices, after accumulating a drop of almost 8% in the last week. This Monday (29/4), almond lots for July plummeted, and ended the session with a significant decline of 15.70%, at US$ 8,931 per ton.

With the closing of this Monday, cocoa reached its lowest value since March 22nd, according to calculations by Valor Data. The daily drop, of almost 16%, was last recorded on the stock exchange in July 1974.

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In a report, the Zaner Group attributed the sharp drop to the favorable outlook for the climate in West Africa, the world’s main producing region.

“A shift to a wetter climate in West African growing areas is expected to benefit the region’s upcoming production, which weighed on prices last week.”

For Rafael Borges Machado, market intelligence analyst at StoneX, the rains have limited power to cause such a strong movement in the stock market.

“There is no new fundamental that justifies such a sharp drop, which is why I believe that technical corrections still dominate cocoa negotiations. Open contracts on the stock exchange are at the lowest levels in ten years, and this flight of speculators leaves the market susceptible to sudden movements like today’s”analyze.

New trend for cocoa?

Machado does not believe that the recent falls represent the beginning of a devaluation of cocoa on the stock exchange, which has been accumulating record prices since the beginning of the year. “We still have a very tight supply problem, and this should not change until the beginning of the next harvest [2024/25], in October. I don’t see any bigger corrections than the current ones.”

The numbers related to supply corroborate the thesis that the price can still continue to rise. Cocoa arrivals from Ivory Coast totaled 17,000 tonnes in the week ending April 28, down from 48,000 in the same week last year. Total arrivals since the start of the marketing year on October 1, 2023, reached 1.354 million tonnes, down from 1.907 million in the same period last year.

In coffee trading on the stock exchange, Arabica contracts for July closed up 1.56%, at US$2.2750 per pound.

Analysts told the report that the coffee market is expected to remain volatile in the medium term. The increases will continue to respond to movements in Robusta quotations on the London Stock Exchange. Conversely, the good prospects for the harvest of the Brazilian crop are a factor in the decline for arabica

There was a strong increase in the value of sugar traded on the international market. In New York, demerara sugar lots for July rose 3.61%, to 19.78 cents per pound. A technical correction guided this Monday’s closing, after recent drops motivated by the prospect of increased production in Brazil.

Orange juice and cotton

Orange juice prices fell this Monday. Contracts for the concentrated and frozen product (FCOJ) for July fell 1.43%, with the price at US$3.6795 per pound. In the case of cotton, lots with the same maturity closed up 0.77%, at 81.52 cents per pound.