Cocoa Ends at 10-Year Low Ahead of Demand Data

By Julie Wernau Features Dow Jones Newswires

Cocoa futures dropped to a 10-year low ahead of demand data expected Thursday out of North America.

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Cocoa for July lost 4%, to end at $1,799 a ton on the ICE Futures U.S. exchange, its lowest close since Sept. 4, 2007.

"I didn't think we'd see $1,800 this quick; every time you think it is coming back, it just ends up crashing on us," said Peter Mooses, senior market strategist at RJO Futures.

Cocoa processing data out of North America, the second largest consumer of cocoa, will be released Thursday after the close. Mr. Mooses said estimates of how many tons of beans factories in North America have processed range widely from negative 2% to positive 2% year-over-year.

Helping the contract fall sharply, hedge funds and other money managers are betting on falling cocoa prices. As of last Tuesday, the bears outweighed the bulls by 22,891 contracts in cocoa, according to data from the U.S. Commodity Futures Trading Commission.

Last week, European processing volumes of raw cocoa beans disappointed the bulls. The tonnage rose 1.1% in the first quarter year-on-year to 339,485 metric tons, falling below industry expectations, according to data released Tuesday by the European Cocoa Association.

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Europe is the world's largest consuming region for chocolate. While the increase in cocoa beans processed is a bump over last year, quarterly figures remain relatively flat and demand for cocoa has failed to recover to 2015 levels, when tonnage reached 342,442 tons in the fourth quarter.

In other markets, raw sugar for July was off 0.7%, to end at 16.41 cents a pound; arabica coffee for July lost 4.5%, to end at $1.343 a pound; frozen concentrated orange juice for May was down 3.1%, to settle at $1.6105 a pound; and July cotton rose 1%, to end at 79.11 cents a pound.

Write to Julie Wernau at julie.wernau@wsj.com

(END) Dow Jones Newswires

April 20, 2017 15:58 ET (19:58 GMT)