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CSCE cocoa eases in technical trade, funds less active

NEW YORK: CSCE cocoa futures eased again in technical trade on Thursday, but the prior day's heavy speculator sales abated as the market considered recent political unrest in top-producer Ivory Coast.

"It was pretty much locals and if any of the funds were involved it was pretty much scalping," said a floor broker.

After early speculative gains, active May slipped $2 to $794 a tonne, having traded $807-790. Second-month July also shed $2 to $824, trading in a $825-837 range.

The rest of the board fell by $3-$4 a tonne each. Dealers said estimated final volume of 8,009 contracts was about average, but at times during the session it felt like a holiday.

There was only slight price reaction to news that Ivorian farmers had suspended a threatened Saturday strike to press the government to order a return to cocoa price stabilisation.

"It didn't seem to affect it at all, as much as that's where the concentration is as far as fundamental news," said the broker.

"The main (Ivory Coast) crop is pretty much all out and the mid-crop hasn't come in yet. So people are pretty much taking a wait-and-see attitute."

On Wednesday, Ivory Coast's military ruler signed an order dissolving its New Caistab commodities regulator as part of efforts to give cocoa and coffee farmers a greater say in the running of their industry.

But the country's cocoa and coffee exporters said Thursday that the government had no right to dissolve the regulator as it was a private entity in which they had a stake.

Traders said that immediate support for May cocoa was pegged at Tuesday's low of $786, then $784-770, followed by the contract low of $756. Resistance is seen at $833 and $845-50.

On the LIFFE, active July cocoa ended down 21 pounds at 581 pounds a tonne in thin trade, which took its cue from the $19 tumble in New York bean prices Wednesday.

The nine-day RSI for May cocoa was an oversold 27 on Thursday, just down from Wednesday's 28. Technical analysts usually interpret an RSI reading of 30 or lower as oversold and 70 or above as overbought.

The CSCE is a subsidiary of the New York Board of Trade. -Reuters