US cocoa futures ended down on Wednesday for the second day running, with speculative selling in the face of a rising dollar wiping out market gains seen at the start of the week, market sources said. The New York Board of Trade's benchmark September contract fell $21, or 1.5 percent, to settle at $1,404 a tonne, near the bottom of a trading range from $1,401 to $1,443.
"You have a clearly defined range. As soon as you get to $1,440, people start selling," said a broker. "People want to get excited about the market, but it didn't do it today."
Indeed, the September contract failed to push through Monday's high of $1,444 a tonne, which was the loftiest price since July 5.
Among other cocoa contracts, December lost $21 to $1,435 a tonne, and back month deliveries shed $20.
In currency trading, sterling tumbled to a 19-month low against the dollar after Federal Reserve Chairman Alan Greenspan indicated US interest rates will continue rising against a backdrop of continued economic growth.
The pound fell to as low as $1.7273 in early trading before recovering somewhat by the time the US cocoa market closed.
"The pound came off quite a bit today. We were playing around that $1,422 level (in September cocoa), and when we got below that the market just shot off and we saw some good volume traded," said a floor trader.
He said final trading volume in cocoa futures reached an estimated 7,700 contracts, up from the official tally of 5,399 lots the previous session.
Market players had expected cocoa futures to fall at the start of trade because of flagging cocoa futures in London's market. Liffe's front-month September cocoa contract fell 9 pounds to settle at 856 pounds a tonne after touching a fresh 3-week high of 878 earlier in the session.
Dealers said the market shrugged at the latest bean arrival figures estimated by exporters in Ivory Coast, the world's leading cocoa producer.
Major exporters estimated bean arrivals at the West African country's ports for the 2004/05 season reached 1,125,434 tonnes between October 1 and July 12, down 11.2 percent from the official tally of 1,267,568 tonnes the same period last season.
"It's July now and it's normal that volumes are low in the ports at the moment. According to our estimates, about 300-400 tonnes are being delivered to the ports each day lately but there is still some more cocoa in the bush," a buyer for an US exporter told Reuters in Abidjan.