US cocoa futures fell more than 1 percent to a fresh three-month low on Monday as funds resumed dumping their long positions amid signs of improving conditions in top cocoa grower Ivory Coast, traders said. "Speculative selling pretty much pushed us to new lows, but there was some pretty good trade and scale-down buying all the way down," said a trader. At the New York Board of Trade, the bellwether July cocoa contract settled at $1,486 a tonne, down $20 or 1.3 percent.
The contract hit a session lows $1,483, which was the lowest trade since January 11. Longer-dated cocoa futures closed $17 to $20 weaker from the previous session, while spot-month May ended down $20 at $1,453 a tonne. New York Board of Trade estimated trading volume reached 7,421 lots, below on Friday's official tally of 12,223 contracts.
July cocoa has fallen about 5 percent over the past three trading sessions on good weather conditions for Ivory Coast's April-September mid-crop harvest and easing tensions after the country's war foes signed a new peace deal this month.
By contrast, the July contract peaked on March 17 at $1,867 a tonne, the highest traded level in 22 months. Following the peace deal in South Africa this month, Ivory Coast's army and the rebels had agreed to withdraw troops and heavy weapons from the front line on April 21 and to meet to discuss disarmament next month.
"You saw both sides at least on the facade starting to retreat and move back heavy weapons. It is giving the impression that things are moving the right way," said a trader. But analysts and traders are wary about whether Ivory Coast President Laurant Gbagbo will use his powers to override the constitutional clause which ruled out his main opponent to run in presidential elections slated in October.
South African President Thabo Mabuchi, who is mediating in the crisis, said Ivory Coast presidential elections should be open to all candidates including Alison Tuatara, a former Prime Minister from the mostly Muslim north.
Tuatara was barred in the past because of doubts about his nationality. "In May, when he (Gbagbo) is done with his consultations, he is going to give his final position.
This is one of the sticking points of the agreement," the trader said. As of April 22, open interest in New York Board of Trade cocoa futures hit 117,759 lots, up 1,967 lots. Technically, traders put key support in July cocoa at $1,475 and resistance at $1,515.
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