Cocoa Drops as Rain Heads to Growing Regions
August 16 2017 - 4:58PM
Dow Jones News
By Julie Wernau
Cocoa prices fell for a third-straight session as a favorable
weather outlook in Ivory Coast, the largest growing region, fueled
ideas that already robust supplies will be topped by a strong
upcoming harvest.
Cocoa for December fell 1.4% to end at $1,839 a ton on the ICE
Futures U.S. exchange.
Cumulative shipments of cocoa beans in Ivory Coast have been a
full 25% higher year-over-year since the season began in October,
and Ghana, the second-largest producer, is reporting its biggest
crop in six years, Commerzbank said in a note. The larger of two
crops, the main crop, could begin as early as mid-September due to
favorable weather conditions, the firm said. Last year, hot desert
winds damaged cocoa crops, but this year those seasonal winds were
mild in West Africa. MDA Weather Services said in a note that
showers should return to northwestern Ivory Coast, central Ghana,
Nigeria, and Cameroon through the weekend.
"These showers may boost moisture supplies a little in Ivory
Coast, but more rains will still be needed there. Soil moisture
will remain adequate for main crop growth in Ghana and central
Nigeria," the firm said.
Michael Kerensky, a trader at R. J. O'Brien & Associates,
said Tuesday he had some funds buying cocoa expecting a bounce that
never occurred.
"They have been trying to bottom feed, which has not worked for
the past few months," he said.
If the contract breaks below $1,821, he said, there could be
more selling short of news to prop up the market.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
August 16, 2017 16:43 ET (20:43 GMT)
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