US benchmark cocoa futures slipped 1.8 percent on Wednesday to finish at a one-week low, pressured by speculative selling and currency-related activity, market sources said.
The New York Board of Trade's cocoa contract for December delivery fell $27 to settle at $1,480 a tonne, the lowest since August 30, after trading from $1,475 to $1,502. March cocoa likewise slid $27 to conclude at $1,520 while back month contracts tumbled $27 to $28.
Cocoa futures opened in the red amid flagging bean values in London in the face of a weaker sterling versus the dollar. Speculators became more aggressive sellers when December broke below technical support of $1,485, traders said.
"When we got underneath yesterday's low of $1,486 we saw some sell-stops," said a NYBOT floor trader. "The (strong) dollar helped to remove some buying from the market and it gave us a little light arbitrage selling on," he said.
The dollar rose broadly after data on labour costs and growth in the service sector suggested greater strength in the US economy than some investors had thought.
A stronger US currency generally makes dollar-denominated cocoa futures look less attractive for foreign investors, compared with the cocoa market in London. In London, the Life's benchmark Decembercocoa contract in London shed 6 pounds to end at 842 pounds a tonne.
Traders said outright selling amounted to about 4,000 lots out of the estimated daily futures turnover of 6,184 contracts. Technically, one trader put near-term support in the NYBOT December contract at $1,458, which was the bottom trade on August 28 and the weakest price in about nine months.
Technical resistance was seen at $1,502 and then $1,520. On the supply front, cocoa bean exports from No 1 producer Ivory Coast's San Pedro port totalled 19,404 tonnes in August, up 59 percent from the same month in 2005, port data showed.
Cumulative exports from the San Pedro port between October and August reached 489,535 tonnes, up from 460,326 tonnes during the same period of the 2004/05 season. San Pedro exports about 43 percent of Ivory Coast's annual production.
Data for the port of Abidjan were not immediately available. Elsewhere, an Indonesian weather service predicted the country's eastern region to have a drier rainy season this year, which traders said could affect the cocoa output from Sulawesi Island.
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