US nearby cocoa futures finished in the red on Thursday after light speculative selling pushed the benchmark price away from its recent two-month high, traders said. The New York Board of Trade's most-active September contract slid $19, or 1.2 percent, to settle at $1,541 a tonne, having dealt from $1,516 to $1,549 in the session. "The short-term guys bailed out immediately," said a trader, noting that they may have been reacting to talk of producer selling or price fixing amid yesterday's gains.
On Wednesday, the September contract peaked at $1,562, up 9.5 percent from Monday's closing price and the loftiest price since April 21. "There was definitely some origin selling out there.
There has been a lot of short covering and that dried up a little bit," said one source. Among other cocoa futures, front-month July, which has a first notice day for delivery on Friday, declined $19 to end at $1,526 a tonne.
Back month contracts shed $17 to $20. NYBOT estimated cocoa futures trading volume reached 14,742 lots, compared with Wednesday's official tally of 21,527 contracts.
One broker said the market appeared to be consolidating. "I don't think anyone is going to chase the market up. The market at $1,400 is cheap and once you get up around $1,600, and knowing what we know now, it's probably a little bit expensive," he said, adding, "It's a pause, a consolidation."
Cocoa futures prices had been idle for weeks, lingering near their lowest levels in 11 months. Prices got jolted upwards on Tuesday by a cocktail of events, ranging from dollar weakness to renewed doubts about a peace process between civil war foes in Ivory Coast, the world's biggest cocoa producer.