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CSCE cocoa ends at 10-week low, March below $800

NEW YORK: CSCE cocoa futures finished at a 10-week nadir on Monday, with speculative selling into stops pushing key March below the psychologically important $800 a tonne level with further falls in bean prices likely.

"That's a sad market. The close (of the March contract) below $800 is pretty disastrous," Mike McDougall, vice-president of the Brazil desk at FIMAT Futures here, said.

Benchmark March cocoa finished $16 easier at $795 a tonne, equalling its close on Nov 16, 1999.

The contract touched a new lifetime low of $794, while the intra-day peak stood at $812.

Most of the back months also sank to new contract lows, with second position May hitting a low of $825 before ending $14 softer at $828.

Back months declined by $17-$14.

The market opened on a soft note, with arbitrage sales pressuring bean futures, floor sources said.

For a while, the March cocoa contract held itself above support at $800 on light trade support.

But a late flurry of speculative selling finally knocked cocoa futures below its support markers.

Traders said the latest CFTC commitments of traders report which showed non-reportables, corresponding to smaller speculators, holding a hefty net long position of 21,332 lots as of Jan. 25 likewise put some pressure on the market.

Combined with non-commercials, meaning speculative funds, retaining a long position of 3,169 lots, traders said bean prices will find it tough to stage a modest recovery.

In London, origin and heavy switch trading helped push LIFFE's March down 18 to 551 pounds a tonne, trading 561-550, three pounds above the 547 pounds contract low set on December 23.

Technically, McDougall said nearby support for March cocoa should now be at $783, followed by $750 and then $725.

Traders pegged nearby resistance in the contract at $855 to $858.

Volume traded Monday ay reached an estimated 10,799 lots against the previous estimated volume of 13,823 lots.

In industry news, the U.S. agriculture attache in Sau Paulo said Brazil's 1999/2000 cocoa crop is expected to be the lowest in the past 30 years at 125,290 tonnes.

Devastation from the Witch's Broom fungus in the producing areas of South Bahia has intensified due to humid weather in the region.

Attache reports are not official USDA data.-Reuters