Cocoa surges 3% on positive US signs
By Sandy Shore, AP
October 18, 2012, 12:06 am TWN
AP--The price of cocoa surged 3 percent as positive signs for the U.S. economy raised hopes that consumers may splurge on more chocolate.
Cocoa for December delivery rose US$64 to finish Tuesday at US$2,418 per metric ton. The price has fallen about 10 percent since hitting a 2012 high of US$2,691 per metric ton on Sept. 6. That's because supplies have been plentiful and demand has been poor.
Investors have been growing more optimistic because of recent positive economic data in the U.S. and a rising stock market. "Looking ahead, we're looking for demand to steadily increase," Vision Financial Group analyst Boyd Cruel said.
The Labor Department said consumer prices rose 0.6 percent last month in large part because of higher gasoline prices. Overall, prices have increased 2 percent in a 12-month period that ended in September.
In addition, the National Association of Home Builders said its survey of builder confidence rose in October to the highest level since June 2006. But factory production increased just 0.2 percent last month, according to the Federal Reserve.
Now, investors will watch closely to see how holiday retail chocolate sales shape up. Much will depend on stronger economic growth in the U.S. and Europe because chocolate is a luxury, not a must-have item like gasoline or basic food products, said Spencer Patton, founder and chief investment officer of Steel Vine Investments LLC.
In other trading, commodities were mixed as investors sorted through a batch of mostly positive U.S. economic data.
Metals prices were mostly higher. In December contracts, gold rose US$8.70 to finish at US$1,746.30 per ounce, silver increased 21.6 cents to US$32.959 per ounce and December palladium gained US$6.35 to US$638.95 per ounce.
December copper essentially was unchanged, ending down 0.15 cent at US$3.70 per pound. January platinum rose US$12.90 to US$1,645.20 per ounce.
New York's main contract, light sweet crude for delivery in November, rose 16 cents to US$92.25 in the afternoon while Brent North Sea crude for December delivery shed five cents to US$113.95.