Cocoa falls on heavy chart-based selling

Cocoa Beans PixHeavy chart-based selling by speculators pushed cocoa futures on ICE lower on Wednes-day, with industry buying prevent-ing steeper losses.

New York cocoa fell $58 per tonne in just one minute at 8:38 a.m. EDT (12:38 GMT), triggering “thousands” of automatic sell orders below last week’s low, traders said. At one point, the contract was down $100 to a session low.

September New York cocoa settled down $59, or 1.8 per cent, at $3,277 a tonne. Total volume was double the average.

Industry buying was seen preventing deeper losses.

“They have some catching up to do because they don’t have much paper cover,” said one U.S. trader. “They’ve been waiting to buy.”

September London cocoa slid £43, or 1.9 per cent, to close at £2,180 a tonne.

Weak demand also pressured prices. Dealers expected the second-quarter grind data for Asia to be published today, with estimates for a year-on-year decline of more than 10 per cent. —Reuters

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