Cocoa futures dropped to a 10-year low ahead of demand data expected Thursday out of North America.
Cocoa for July lost 5.1% to $1,777 a ton on the ICE Futures U.S. exchange, on track for it's lowest close since Aug. 28, 2007.
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"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.
"We're just deciding whether we're staying in or getting out before the data," he said.
Helping the contract fall sharply, hedge funds and other money managers 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.
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 0.1% at 16.50 cents a pound, arabica coffee for July lost 1.1% to $1.3915 a pound, frozen concentrated orange juice for May was down 2.4% at $1.6215 a pound and July cotton rose 0.7% to 78.88 cents a pound.
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(END) Dow Jones Newswires
April 20, 2017 11:48 ET (15:48 GMT)