New York cocoa futures fall

US cocoa futures fell more than 2 percent on Wednesday, as the market extended its pull-back from last week's five-month highs amid ongoing fund liquidation and chart-based selling, brokers said. "The funds are long this market and the fact that there was no follow-through from last week's rally forced some guys to dump it," said one floor dealer.
"It looked like it was all fund long liquidation into some scale-down trade buying." In the pit, ICE March cocoa futures ended down $52, or 2.5 percent, to $2,034 per tonne, while the rest of the board closed with losses ranging from $31 to $48.
In electronic trade, the key March contract was trading down $46 to $2,040 by 12:35 pm EST (1735 GMT), dealing between $2,022 and $2,080. Back months were down from $37 to $52. Last week, the March contract hit $2,147 a tonne, a high dating back to July 25. The failure to extend the gains through the $2,150 level sparked the recent wave of fund liquidation. The ongoing long liquidation by the funds pressured prices through key technical support areas on Wednesday, which quickened the pace of the decline, traders said.
"We broke through the $2,060 level, which was an old low, and then we ran down to the $2,052-$2,050 level, which was at the 20-day moving average. There was some support there, but that failed, and now we're looking at $2,030, which is the trend reversal point," said one. Overseas, the London International Financial Futures Exchange (Liffe) was closed on Wednesday for the Boxing Day holiday.
Trading will resume on Thursday, December 27. On Monday, Liffe March contract closed 5 pounds lower at 1,070 pounds per tonne. Meanwhile, workers at Ivory Coast's Coffee and Cocoa Bourse (BCC) and other industry bodies will restart strike action from Thursday to demand better pay and conditions and management changes, a union official said on Wednesday.
By 12:00 pm EST (1700 GMT), ICE estimated only 378 contracts had traded in the pit, compared with the 941 lots traded on the floor on Monday. Total volumes on Monday reached 7,932 lots. Open interest in ICE cocoa futures fell 453 lots to 176,802 contracts as of December 24.