Cocoa prices were on track to fall 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 1.5% to $1,836 a ton on the ICE Futures U.S. exchange.
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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 conditions will remain dry across most cocoa areas. Over the next few days, the firm said dryness will persist across most of Ivory Coast, which will maintain stress on main crop growth. Soil moisture should remain adequate across Ghana, however.
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.
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(END) Dow Jones Newswires
August 16, 2017 11:28 ET (15:28 GMT)