US cocoa settled on Thursday at a one-month low on speculative fund liquidation as part of a correction after the market recently hit a three-week top, traders said. The New York Board of Trade's benchmark September cocoa contract sank $56 or 2.7 percent to finish at $2,003 per tonne, with trades ranging from $2,000 to $2,059.
The rest also lost $56 with December ending at $2,037. The September contract trading on the IntercontinentalExchange NYBOT electronic platform was $50 lower at $2,009 at 1:27 pm, in a band from $2,000 to $2,068.
Bean values received strong technical support at the key $2,000 a tonne level, according to traders. "The market is still worried about some production losses in Asia. You cannot rule out a slide to $1,970, $1,980 (per tonne)," said one market observer. The worries are a result of recent heavy rains and flooding on Slaws Island in Indonesia, the world's third biggest producer of cocoa.
Still, there are plenty of reasons to think that tight supplies should put a floor under this market, he added. In Ivory Coast, farmers in the country's westernmost growing zones said on Thursday they expect to harvest some of the upcoming main crop as mid-August, following the poor April-September mid crop.
In West Africa, scattered showers and thundershowers were predicted for both on Thursday and Friday, with an anticipated rainfall of 0.1 to 1 inch of rain possible on both days, DTN Meteorlogix said. The main crop in Ivory Coast and Ghana will depend on adequate rains in the next few months, DTN said. In Brazil, mostly dry conditions were reported in the west, with some scattered showers in the east.
NYBOT estimated around noon that 790 contracts had traded on the open-outcry floor, up slightly from Wednesday's lighter trading volume of 715 contracts, following on Tuesday's rally of 1,350 lots tallied in the pit and 11,864 contracts traded on the ICE electronic platform.