CSCE cocoa futures ended down 2,7 percent and close to a 5-week low on Monday as speculative selling overcame scale-down manufacturer buying, brokers said.
Cocoa prices sank to their lowest level since November 26 as commodity funds and other speculators sold approximately 5,000 futures contracts.
"Specs sold about 5,000 lots today. Manufacturers did some buying into the decline with the dollar weakening, but they let the market come to them," said one commission house broker.
"The market trades heavy. I think we're going lower," he added.
The benchmark March cocoa contract ended down $41 at $1,474 a tonne, off the bottom of a $1,456 to $1,506 range.
The $1,456-low was the lowest price seen since November 26.
"A move under $1,415, the intraday low of November 26, will put the market in position to test the October low at $1,347," said one chartist.
May cocoa lost $34 to close at $1,485 a tonne and the back months settled $33 to $36 lower.
Estimated volume reached 13,457 lots Monday compared to 8,312 lots Wednesday when the market was last open. Monday's volume included 1,560 switches and a quantity of swaps.
Cocoa authorities in top producer Ivory Coast expect the main crop to between 800,000 and 900,000 tonnes but industry analyst anticipate a harvest of around one million tonnes.
In other news, Ivory Coast's cocoa marketing body has set its indicative minimum farmgate price for cocoa at 385 CFA francs ($0.73) per kg for the period January to March, unchanged from the previous three months.
Ivory Coast also sharply cut the cocoa buying ceilings for the first three months of 2004 to 40,000 tonnes per exporter from 70,000 tonnes in the previous quarter, the state-run regulatory authority said on Monday.
Officials at the Regulatory Authority for Cocoa and Coffee (ARCC) told Reuters that the ceilings had been lowered because supply of main crop beans to Ivory Coast's local market had slowed.
Technicians lowered support for March to $1,456 and then $1,445 a tonne with resistance at $1,500 a tonne and then $1,515 a tonne.