US cocoa futures settled sharply lower for the second straight day on Tuesday, at a three-week low on heavy speculative long-liquidation and chart-based weakness, traders said. "We are seeing more long liquidation in the cocoa market. This is technical failure after failing to get above the psychological $3,000 level," one cocoa dealer said, about the May contract.
The benchmark ICE May cocoa contract settled down $126, or 4.7 percent, at $2,604 per tonne, the weakest close since February 25. Trades moved in another wide range from $2,688 to $2,588. The market trades until 3:15 pm By 12:55 pm EDT (1655 GMT), the May contract was down $41 at $2,689 per tonne.
The rest were $36 to $118 lower. At the day's low, the May contract was 13 percent below on Friday's 28-year peak at $2,971. Support for the May contract was seen at $2,545 and $2,535. "Specs are dumping long positions. I've got to believe industry is buying scale (down)," one cocoa trader said, in the session.
On the London market, cocoa futures inched higher with the May contract up 3 pounds at 1,415 pounds per tonne, by 12:55 pm. Meanwhile in the top cocoa producer, port dock workers in Ivory Coast on Tuesday suspended a week-old strike over pay that had blocked cocoa and coffee exports and said they were negotiations with the government and exporters.
Farmgate cocoa prices in Ivory Coast's main growing regions were mixed from March 10 to 16 as short supply supported prices in some areas and poor quality weighed elsewhere, officials and farmers said on Tuesday. Volume on ICE, heavy 26,848 cocoa contracts traded on Monday while open interest sank 4,498 lots to 171,554 lots, exchange data said.
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