By Julie Wernau
Cocoa futures fell Tuesday, dropping back into a tight trading range after failing to break higher for a second-consecutive session.
Cocoa for March delivery lost 2% to end at $2,256 a ton on the ICE Futures U.S. exchange. Cocoa futures have lost 28% since their most recent high of $3,113 a ton in August, as a strengthening dollar eats into demand for dollar-denominated goods such as cocoa abroad.
The WSJ dollar index, which measures the dollar against a basket of currencies, was up 0.2% recently.
The larger of two cocoa crops in West Africa, the world's largest growing region, is recovering better than some traders anticipated following a dry spell that damaged crops earlier this year.Some investors said they are waiting to see if cocoa has touched a bottom before placing long positions in the market.
"It's in no-man's land so we want to let some more time pass before getting involved," said Adam Sarhan, chief executive of 50 Park Investments.
Thinner trading volumes suggest waning selling pressure, Sucden Financial said in a note. The contract was unable to close above $2,267 a ton Tuesday, a technical trading level the firm said would have signal gains for coming sessions.
Over the weekend, Ivory Coast and Ghana saw light showers and more are expected this week but overall conditions remain favorable for the harvest, according to MDA Weather services.
In other markets, arabica coffee for March lost 0.3% to end at $1.4385 a pound, frozen concentrated orange juice for January was up 1% at the close to settle at $2.018 a pound, March cotton was down 0.3% to settle at 69.34 cents a pound and raw sugar for Marchrose 0.1% to end at 18.25 cents a pound.
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(END) Dow Jones Newswires
December 20, 2016 17:11 ET (22:11 GMT)
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