By Carolyn Cui
Cocoa prices fell on Thursday, as the futures market remained under pressure amid signs of ample supplies in the physical market.
Cocoa futures for March delivery fell 4% to settle at $2,189 per metric ton on the ICE Futures U.S. exchange, pushing toward the three-and-a-half-year low of $2,170 per ton hit in early December.
Money managers have been consistently slashing their net long position in the New York cocoa market over the past few months, and last week the group's net holdings turned into negative territory for the first time since August 2015, according to Commitments of Traders report.
The soured investor sentiment reflected a fundamental shift inthe world's cocoa market, where supply is expected to outstrip demand for the first time in years, thanks to favorable weather conditions in Ivory Coast, the world's largest cocoa grower.
In Ivory Coast, cocoa deliveries to the country's ports had reached about 700,000 tons by Dec. 18 since the start of the season on Oct. 1, according to a Reuters report, running about 4.5% higher from the same period the previous season.
"The market has gone down hard in the last few weeks and needs a breather," wrote Jack Scoville, an analyst at Chicago-based Price Futures Group. "It looks like the coming holidays are providing that chance to rest."
But the relief was yet to come for the cocoa market on Thursday.
Mr. Scoville said that some private reports showed that processors and manufacturers had plenty of cocoa and products on hand, and increased supplies allowed these commercial traders to source cocoa at much cheaper prices in the physicalmarket.
In other markets, cotton futures for December delivery added 0.1% to settle at 70.20 cents a pound, arabica coffee for March was down 3.8% to close at $1.3810 a pound, frozen concentrated orange juice for January delivery lost 1.8% to end at $1.9435 a pound, and sugar for March delivery was down 0.2% to 18.16 cents a pound.
-- Write to Carolyn Cui at Carolyn.firstname.lastname@example.org
(END) Dow Jones Newswires
December 22, 2016 15:30 ET (20:30 GMT)
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