Cocoa futures ended narrowly mixed, thanks to participants covering their short positions which helped prices retrace from two-month lows hit in the session, traders said.
On the New York Board of Trade, the most-active December cocoa contract settled at $1,456 a tonne, down $1, ranging from a $1,442 to $1,474. The bottom trades was the lowest since July 14, and sharply down from a summer rally peak at $1,723 on August 27.
"We've had a 300-point drop, so it is only normal that some people are thinking the market is oversold," said one hedge trader. Spot September dipped $19 to $1,436, while longer-dated cocoa futures ended steady or up $1.
On the weather front, updated forecasts showed a continuation of rain in West Africa. Private forecaster Meteorlogix predicted scattered showers in the region for the next two days.
Most of top grower Ivory Coast's cocoa areas have seen above normal rainfall in September, raising farmers' hopes of a good 2004/2005 harvest despite a prolonged dry spell in the summer, reported Reuters in Abidjan.
"Fundamentally, the rains have been above average and with that some anxieties are gone," a New York-based trader said. While the rainfall has benefited plants, some farmers in Ivory Coast were having difficulties trying to dry their harvested beans.
NYBOT's estimated cocoa futures volume reached 5,975 lots, compared with Friday's 5,187 lots. Open interest in the cocoa market fell 1,358 lots to 100,733 lots as of September 10.
On the charts, one trader said technical support for the December delivery lies at $1,442 with resistance at $1,500.
Comments
Comments are closed.