US benchmark cocoa futures finished near a two-week low on Wednesday, depressed by trade and fund selling that began late on Tuesday on waning fears about a farmer strike in top grower Ivory Coast, traders said.
The most-active December cocoa contract on the New York Board of Trade fell $13 to settle at $1,427 a tonne, near the bottom of a $1,424-$1,442 trading range. It was the lowest settlement since October 8, when it closed at $1,425.
March 2005 likewise dipped $13 to $1,443, while distant futures retreated $8 to $13. Cocoa prices opened lower in line with weaker cocoa futures in London, with some upside support coming from a weakening dollar and news that striking cocoa farmers in Ivory Coast have blocked deliveries for the third day.
"Prices did not break down that much, primarily because of the weakness of the dollar and the pound against the euro," a trader said.
"I'd imagine the foreign currency situation brought in some foreign buying interest in both markets (New York and London), which kept them from breaking down in a big way," he said.
Meanwhile, major exporters in Ivory Coast remained closed on Wednesday at the demand of the striking farmers and because roadblocks in cocoa growing regions around the West African country were preventing cocoa from reaching warehouses.
The farmers demand a higher indicative minimum farmgate price than the 390 CFA francs (about 74 cents) that was set by officials last week for the 2004/05 season. The farmers started to strike on Monday.
Joseph Oulai Tchelan, head of a farmers union who had been quoted on Tuesday saying the strike would end this week, told Reuters on Wednesday the action could continue indefinitely.
Still, many market players say the farmers will eventually sell their beans, as their income is dependent on cocoa. NYBOT's estimated cocoa futures volume just before the market closed reached 3,715 lots, compared with 6,203 lots the previous session.
Open interest in NYBOT cocoa rose 473 lots to 121,105 lots as of October 19. On the charts, traders put technical support for December delivery at $1,390, with resistance at $1,480 and then at $1,543.
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