US cocoa futures prices slumped to a fresh two-week low on Wednesday, extending the previous session's losses amid continued dollar strength and light speculative selling, traders said. The New York Board of Trade's most-active September cocoa contract lost $12 to settle at $1,497 a tonne, after trading from $1,488 to $1,506.
It was the contract's lowest finish since June 14. Front-month July cocoa slumped $14 to $1,485, while longer-dated cocoa contracts shed $12. "The dollar strengthened and some light selling came in," said one floor trader.
"But the volume was light," he added. Indeed, traders said cocoa futures trading volume reached an estimated 5,432 lots, compared with Tuesday's official tally of 4,510 contracts.
Light arbitrage-related selling hit New York cocoa prices after the dollar extended its gains vs. the pound. Sterling tested an eight-month low against the dollar after UK data showed retail sales fell at their fastest pace in at least 22 years, boosting expectations of a rate cut. Meanwhile, the US Federal Reserve is widely expected to raise interest rates by a quarter percentage point to 3.25 percent on Thursday, making the greenback more attractive to investors. In London, cocoa futures settled flat. Life's September contract ended unchanged at 863 pounds a tonne.
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