New York cocoa futures on ICE tumbled to a 9-1/2 month low in heavy volume on Thursday as investors liquidated long positions on technical sell signals, while arabica coffee rallied above its 200-day moving average. Raw sugar futures fell, coming off Wednesday's three-week high. March New York cocoa closed down $46, or 1.6 percent, at $2,821 a tonne, after earlier touching $2,780, the weakest level for the second month since late January.
"It's a lot of technical long liquidation here, new short selling here as well," one veteran US cocoa dealer said. The market fell sharply for a second day, ahead of the December contract's first notice day on Friday, attracting technical selling as it fell through lows set earlier this year and dropped below the 38.2 percent Fibonacci retracement level from the 2011 low.
Some commercial traders took advantage of the falling price and bought, traders said. The tumble comes after fears about shipment disruptions due to the potential for the Ebola virus to spread to top grower Ivory Coast fuelled a surge in prices to a peak of $3,349 in late September. Romain Lathiere, head of dealing at Diapason Commodities Management in Lausanne, Switzerland, noted there was talk of weakness in fourth-quarter European grindings, which added to the bearish mood.
March London cocoa closed down 12 pounds, or 0.6 percent, at 1,873 pounds a tonne, after falling to 1,844 pounds, the lowest since May. March arabica coffee on ICE closed up 4.40 cents, or 2.3 percent, at $1.9315, rising for the third straight day and pulling away from Monday's six-week low of $1.8540. Prices had weakened over the past month as trees in top-grower Brazil received much-needed showers, but concerns remain that rains may be insufficient to prevent further damage to the 2015/16 crop. ICE robusta coffee futures were higher, with January ending up $34, or 1.7 percent, at $2,075 a tonne. March raw sugar settled down 0.35 cent, or 2.1 percent, at 16.01 cents a lb, while March whites fell $10.00, or 2.3 percent, to end at $424.10 a tonne.
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