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CSCE cocoa ends slightly down, switches dominate

NEW YORK: CSCE cocoa futures settled a little weaker on Tuesday, having come under pressure from speculative selling, in another lackluster session dominated by switches.

Front-month May cocoa fell $4 to close at $803 a tonne, trading $819-$801. The rest of the board shed $6, with active July settling at $836 after trading $852-$832.

"It was basically all switches again today. Just a lot of rolling out (of front month) here," one floor trader said.

Spot May will enter its month-long notice period on Friday and operators are busy with book-squaring activities, rolling into the now active July contract.

Open interest in May declined by 2,253 contracts as of April 10 to 17,861, while it rose by 2,055 to 29,384 contracts in second-month July.

Early buying by industry in July and September took bean prices to their intraday high, but as London closed, the market weakened with speculative selling triggering light sell stops, traders said.

"There was some July and Sep buying, but then we came off with some light stops and broke unchanged and there was some scattered scale down buying, but no big action," the floor trader added.

He said that switch volume was estimated at around 4,000 lots.

"I was a little surprised because the switch tightened in for a moment, I guess someone had an order, but it fell right back out," one trader said.

"But it was really a dull, featureless session."

Traders remain unconvinced that a strike threat by Ivorian producers will have any effect at all on cocoa prices as the great majority of produce has already left the country.

Ivorian farmers have said they would block marketing of farm products from April 17 if the government did not give them control of the New Caistab commodities supervisory body.

"The cocoa's gone. It's left. It's (strike) a non-issue," one of them said, adding that the market would now be turning its attention to the Indonesian crop, which will reach its harvesting peak later in the month.

Indonesia is the world's third largest producer after Ivory Coast and Ghana.

In fundamental news, exports of cocoa beans from top producer Ivory Coast totalled 218,816 tonnes in January, up 19 percent year-on-year, in part because exports in January 1999 were depressed due to late harvesting.

On a technical basis, traders said July cocoa should enjoy support at the contract low of $779. Resistance, on the other hand, will likely be seen at $867 and then $911.

CSCE estimated final volume was 12,826 lots, against the previous official tally of 12,562 contracts.

Call volume hit an estimated 1,497 lots while put volume touched an estimated 106 lots.

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