New York cocoa futures weakened on Thursday for the third day in a row, sparked by a resumption of speculative selling on further dollar recovery in the session, traders said. New York Board of Trade's most-active March cocoa slid $12 to settle at $1,638 a tonne, near the low end of a $1,632-$1,670 daily trading range. Spot December, which expires on next on Wednesday, fell $12 to $1,648 and longer-dated contracts ended down $13 to $15.
In general, a strengthening dollar encourages players in the cocoa futures market to sell in New York and buy in London for arbitrage purposes. In London, Life's benchmark March closed just one pound weaker at 885 pounds a tonne.
"It was mostly spec selling today," said a source on the NYBOT exchange floor. "It's weak longs pulling out," he said. New York's March contract has fallen about 5 percent from Monday's top at $1,723, it's highest price since November 16 when it was retreating from a peak during last month's civil upsurge and delivery stoppage in leading cocoa producer Ivory Coast.
Farmers and co-operatives in the Dale region, which accounts for about a quarter of Ivory Coast's cocoa production, said current harvests were down from last year because of dry weather and a lack of pesticides and fertilisers.
However, co-operatives said the decline was still hard to quantify or predict its effect on the whole season, reported Reuters in Ivory Coast.
A dealer said trading volume in cocoa futures were 5,151 lots just before the market closed, down from 5,581 lots the previous session.
Open interest rose by 149 lots to 119,874 lots as of December 8. Technically, traders see support in the March contract between a gap of $1,617 and $1,605 with resistance at $1,685 and then at $1,723.
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