New York cocoa slips

US cocoa futures contracts settled lower on Monday as speculators and funds played both sides of the market, which lacked direction and ignored the typically supportive firm sterling, dealers said.
"Technically the market's overbought and that's why we continue to fail as we get closer to that $1,800 level but at the same time we have some underlying support because of the crop situation in the Ivory Coast," one trader said.
Firm sterling can attract arbitrage buying here. The New York Board of Trade's benchmark May contract fell $12 to close at $1,778, in dealings from $1,771 to $1,786.
July slipped the same to $1,805, after trading from $1,801 and $1,814. The rest settled down $9 to $10. On the IntercontinenalExchange NYBOT electronic platform, May was up $5 at $1,795, at 12:57 pm EDT (1657 GMT) while July gained the same to $1,822.
Electronic trading ends at 3:15 pm Weather conditions in the world's top cocoa growing country Ivory Coast prevented deeper losses, traders said. Rains fell in some Ivory Coast cocoa-growing regions last week except in central areas such as Dale where a months-long dry spell is set to slash production during the imminent mid-crop season, farmers said on Monday.
A short shower lasting just a few minutes fell on some parts of Daloa on Friday while other areas remained bone dry. The Daloa area produces around a quarter of the average annual output of 1.3 million tonnes in the world's top cocoa grower.
"I'm expecting this market to get one washout similar to what we saw a couple weeks ago. That might give the market the strength to finally get above $1,800 and see some follow-through buying," one dealer said. The market may need to move lower through long liquidation that could force the May contract to retest the $1,700 level before it will move higher, the dealer explained.
On March 6, the May contract closed down 3.6 percent to close at three-week low at $1,715 per tonne, after fund liquidation triggered sell stops. NYBOT estimated volume around noon at 1,768 lots, compared to the 8,371 officially tallied on Friday when 6,496 of these traded electronically. In London, the Liffe may contract climbed 10 pounds to 995 pounds, near the upper range of the session's trades between from 978 to 1,001 pounds, at 12:54 EDT (1654 GMT).
July rose 7 pounds to 1,004 pounds. In related news, cocoa arrivals at ports in Ivory Coast reached around 896,000 tonnes between October 1 and March 18, according to a rough estimate by major exporters on Monday, compared with 900,006 in the same period last year. Shippers said around 3,000 tonnes of beans arrived at the ports in the week of March 12-18. Last year's deliveries in the same period were several thousand tonnes higher.