Cotton prices fell on Thursday, as traders rushed for the exit after a cotton trade group upwardly revised its forecast for global output.
Cotton futures for May delivery tumbled 1.6% to 60.64 cents at the ICE Futures U.S. exchange. Prices for the contract had reached a two-month high early this week on bullish fundamentals.
Cotton prices had rallied in recent days as fundamentals have turned supportive of late, fueled by a surprisingly strong reading on the U.S. export sales, a modest setback in Chinese cotton production and drawdown in ending stocks. The market was also supported by the increasingly risk-taking sentiment and a broad rise in commodity prices.
Separately, demand for the main ingredient in chocolate remains weak, according to the latest report from the National Confectioners Association.
North American cocoa processors reported on Thursday that total cocoa beans processed during the first quarter of 2016 dropped to 118,790 metric tons, the lowest level for the same quarter in five years. On a year-over-year basis, the amount of cocoa beans ground fell 2.2%. During the quarter, cocoa prices dropped 8% amid a global commodities rout. Cocoa prices rose 1.2% to $2,988 per ton Thursday at ICE Futures U.S. exchange.
In other markets, raw-sugar futures rose 0.9% to settle at 14.13 cents a pound, arabica coffee for May rose 1.2% to $ 1.2510 a pound, and frozen concentrated orange juice futures were down 0.2% to close at $1.4070 a pound.