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CSCE cocoa retreats, ends lower on spec selling

NEW YORK: CSCE cocoa futures ended sharply lower on Friday when speculators sold back their long positions after the previous day's rally, in light transactions, traders and brokers said.

Active March cocoa fell $21 to finish just off the day's lows at $850 a tonne, trading between $872-$847. May shed $19 to end at $878, whilst back months also lost $21.

CSCE cocoa market will be closed on Monday in observance of Martin Luther King Jr's birthday. Trading will recommence on Tuesday, Jan. 18.

Bean prices opened slightly above market expectations on light speculative buying only to head progressively south when local and speculative selling triggered stops under $862 (March basis), floor traders said.

"It's the guys who bought it yesterday. The market didn't hold and when it got through 862, they sold it exactly where the market took off yesterday, but not as much volume," one floor dealer said.

"It was the specs getting out. There was pretty good spec buying, but not enough size and most of the day was just locals to locals," one trader said.

In fundamental news, cumulative arrivals of 1999/00 cocoa beans at Ivory Coast's ports were estimated at around 615,000 tonnes by January 9, compared to 691,000 tonnes by January 11 during the 1998/99 crop year.

Rains in Ivory Coast's cocoa belt in the first 10 days of January were well above average, with heavy downpours in coastal growing areas boosting soil humidity.

Crop analysts see the rains as beneficial to flowering and cocoa pod survival. "The fact that it is a bit wetter than normal should aid survival of the pods on the trees and should make conditions better for early flowering of the mid-crop," one said.

Technically, chartists pegged nearby resistance for March CSCE cocoa at $875, while nearby support was seen at $839-35, followed by $824-20, then all the way down to $804-800.

Volume traded reached an estimated 6,326 lots against the previous official volume of 11,229 lots. -Reuters