Cocoa Futures Remain at 23-Month High on Supply Concerns

  NEW YORK - Cocoa futures rose to their highest price in nearly two years

Tuesday as traders bet that weather in West Africa would continue to interfere

with supplies.

  Heavy rains in the region are "slowing the shipment of a lot of cocoa into

the ports," said Fain Shaffer, president of Indianapolis-based brokerage

Infinity Trading Corp. West Africa is the source of about 70% of the world's

cocoa, the key ingredient for chocolate.

  The rain isn't expected to reverse the effects of dry weather in July and

August, when the main crop was developing, traders and analysts said. As a

result, the beans being harvested may be of lower quality or fewer in quantity.

  "I think that there's a little bit more upside" to prices, Mr. Shaffer said.

  Cocoa for December delivery on the ICE Futures U.S. exchange ended 0.7%

higher at $2,718 a ton Tuesday, the highest settlement since November 2011.

  Demand for cocoa beans ahead of the holiday season in the U.S. has also

buoyed prices for the chocolate ingredient. U.S. warehouse stock piles are at

their lowest level since Feb. 26, and are down 6% from a year ago.

  Traders also expect that cocoa grindings--the tonnage of beans processed in

Europe and North America-- will rise in the third quarter. Grindings are viewed

as a measure of demand for chocolate.

  The International Cocoa Organization estimates global cocoa supplies will

fall short of demand by about 70,000 tons in the 2013-14 season, which started

Oct. 1. The forecast came after supplies missed demand by 52,000 tons in the

2012-13 season, the first supply deficit since 2010.

  Cotton for delivery in December on ICE ended 0.4% lower at 83.69 cents a

pound, the lowest settlement since Sept. 9. Futures tumbled 3.6% during the

previous session after Tropical Storm Karen left growing areas in the

Southeastern U.S. largely unscathed.

  "The tropical storm did no damage, and (investors) really slammed (the

market)," said Mike Seery, president of Seery Futures, a brokerage in

Plainfield, Ill. And "with the harvest coming in, you're going to get that

supply and maybe some harvest pressure" on the market, he added.

  Raw sugar for March delivery settled 0.2% higher at 18.62 cents a pound, a

near 7-month high, on concerns about supplies in Brazil, the No. 1 producer of

the sweetener. Heavy rains have disrupted harvesting during the tail end of the

sugar-cane crop, pinching supplies as mills prioritize the production of

ethanol over sugar this season.

  Arabica coffee for December delivery ended 0.5% higher at $1.1505 a pound,

and orange juice for delivery in November closed 1.1% higher at $1.2920 a pound

in very thin trade.