New York cocoa futures fell to a 7-1/2 month low on Monday, before finding some support, following news that top producer Ivory Coast may cancel and resell around 200,000 to 250,000 tonnes of exports.
Dealers said the move was likely to result in the cocoa reaching the international market more quickly and helped to largely erase nearby premiums in the cocoa market.
Ivory Coast's cocoa marketing board has given exporters six days to supply documentation for export contracts, including proof of a counterparty, or they will be cancelled and resold, the Coffee and Cocoa Council (CCC) wrote in a memorandum seen on Friday.
December New York cocoa was up $3 or 0.1 percent at $2,765 a tonne at 1354 GMT after touching $2,743, the weakest level for the benchmark second month since January 28.
"It (the CCC news) spooked the market," one dealer said, adding the news helped to lessen concern about nearby supply tightness though the longer-term consequences remained unclear.
"There is no reason to buy the market other than the fact it is oversold," the dealer continued, adding buying emerged just above the 2016 low for the second month of $2,738.
December London cocoa was off 3 pounds, or 0.1 percent, at 2,180 pounds a tonne after setting a 3-1/2 month low for the second month of 2,160 pounds.
Dealers noted front-month September traded at level money with December on Monday after commanding a premium of as much as 45 pounds around a week ago. A small premium of about 6 pounds had been re-established by 1354 GMT.
Arabica coffee futures fell as the market retreated further from last week's 18-month high.
Prices had risen sharply in the second half of August and early this month in a largely technically-driven rally but the advance now appears to have run out of steam, prompting a bout of profit-taking.
December arabica coffee was off 0.8 cents or 0.5 percent at $1.5035 per lb. The second month had peaked at $1.5570 on Thursday, its highest level since February 19, 2015.
November robusta coffee was off $1 or 0.05 percent at $1,909 per tonne.
Raw sugar futures were lower, weighed on partly by weakness in crude oil and many other commodity markets as investors looked to shed riskier assets.
October raws was off 0.9 percent at 19.81 cents per lb although it remained well within its trading range of 19.50 to 21.00 cents which has held for more than five weeks.
White sugar futures were also mostly lower although October, which expires later this week, was up 0.15 percent at $542.00 per tonne.