US cocoa futures fell more than 2 percent on Monday from a recent 2-1/2-month peak amid trade profit-taking, swelling bean arrival estimates and improving political conditions in top cocoa producer Ivory Coast, market sources said.
The New York Board of Trade's (NYBOT) active March cocoa contract settled down $38, or 2.6 percent, at $1,440 a tonne, after dealing from $1,435 to $1,460. On Friday, the contract peaked at $1,484, the loftiest price since September 14.
Among other cocoa futures, May dropped $38 to conclude at $1,460, and the rest of the board fell $36 to $40. Total trading volume of cocoa futures reached an estimated 9,457 lots, down from Friday's official tally of 12,247 lots.
"The specs bought on Thursday, on Friday and today again, but there was good hedging flow and light profit-taking by the trade," said a New York-based trader. "In the meantime the arrivals from Ivory Coast are very good," he added.
Exporters in Ivory Coast estimated bean arrivals at the West African country's ports between October 1 and December 4 amounted to around 465,000 tonnes, up 55 percent from 300,000 officially tallied at the same period last year.
"It's crop, but I don't know if that's an alarmingly large number because the crop can end," said one cocoa importer. Meanwhile, opposition and rebels in Ivory Coast on Sunday welcomed the naming of Charles Konan Banyu, governor of West Africa's central bank, as interim prime minister.
Brokers and analysts said a calmer political climate in the world's No 1 cocoa producer helps ease concerns about the potential for more supply disruptions linked to violence. "As long as everyone agrees on the candidate, then that is bearish for the market," said a New York-based cocoa broker.
Ivory Coast has been split in two since rebels seized its north after failing to oust President Laurent Gbagbo three years ago.
A series of UN-backed peace deals have so far failed to reunite the country. The move to name an interim prime minister was brokered by African mediators and could break a deadlock in the faltering peace process.
But traders remained sceptical about Banny's power. "The big test is whether Konan Banny can convince the rebels to do what nobody has been able to convince them to do that is to disarm," said a trader.
"If they disarm it will be big step forward. But that remains to be seen." In London, the Life's March cocoa contract settled at 864 pounds a tonne, off 2.9 percent.