US cocoa futures crumbled more than 5 percent to finish at a five-week low on Friday, on pressure from outside markets and demand concern on continued global economic woes, traders said. Benchmark May sank $140 or 5.5 percent to settle at $2,430 per tonne, the weakest close for the second-position contract since January 15.
Wide trading range from $2,419 to $2,557. At 12:53 pm EST (1753 GMT), May futures were down $150 at $2,420 per tonne, with volume at 8,649 lots. Next support level for May contract pegged at $2,416, then $2,360-$2,350 - traders. The electronic platform trades until 2:45 pm. Long liquidation on chart-based signals, triggering automatic sell orders, and on pressure from outside markets as the Reuters-Jefferies CRB index fell more than 1 percent - traders.
Additional pressure from US stock markets, with the Dow dropping to low levels dating back more than six years - traders. "(There are) lots of demand worries out there with the world economic meltdown continuing," - Jack Scoville, a vice-president with brokers Price Group in Chicago.
"Cocoa is higher relative to the others, so it can break harder too," - Scoville, referring to cocoa's steep fall. The narrowing of the gap of arrival figures from top grower Ivory Coast, on a weekly basis, also viewed as weighing on the market amid demand concerns due to the gloomy global economic outlook - traders.
Cocoa arrivals at ports in top grower Ivory Coast showed 25,994 tonnes of beans arrived at the ports of Abidjan and San Pedro from February 9 to February 15, up from 18,201 tonnes in the same week of the 2007-2008 season - data from exporters. Asia's largest cocoa grinder Malaysia, has asked suppliers in Indonesia to delay the shipment of up to 10,000 tonnes of beans because of falling demand for chocolate ingredients - dealers.
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