London cocoa futures slumped more than five percent to a two-week low on Wednesday after a sell-off by funds with long positions came hard on the heels of a strong round of origin sales, traders said.
Liffe's benchmark December plummeted 50 pounds to close at 938 pounds a tonne, extending Tuesday's 1.7-percent drop and hitting the lowest level since August 17.
Prices ranged between 930 and the day's opening high of 980 pounds. "There was a bit of a sea-change yesterday with the first sign of producer selling in a while," one dealer said. "I think a lot of people suddenly realised that this is a market that can go down as well as up."
Losses were aggravated by New York trading, where NYBOT's December cocoa also tumbled to a two-week low.
Improved weather conditions in Ivory Coast are also helping spur sales as concern about a dry spell in June and July eases, another floor source said.
Forecaster Meteorologix expects scattered showers and thunderstorms in West Africa on Wednesday and Thursday.