By Carolyn Cui
Cocoa pulled back Friday after posting its biggest one-day gain in five years a day earlier, despite reports of gunfire in Ivory Coast ahead of negotiations to end an army mutiny in the world's largest cocoa producer.
Cocoa for March fell 0.5% to $2,219 a ton on the ICE Futures U.S. exchange. The contract soared 4.8% in the previous session, the largest one-day percentage gain since March 2012.
News reports from Ivory Coast's second largest city, Bouake, showed that soldiers fired guns into the air to disperse protestors Friday as the defense minister arrived for talks with leaders of a military mutiny that paralyzed much of the country last week.
But the tensionswere not enough to scatter cocoa bears. Prices of cocoa have been sliding since mid-2016, amid signs that West African production is expected to be large for the current marketing year due to favorable weather conditions.
"Recent protests by soldiers in separate cities is not yet sounding alarm bells or impacting the crop arrivals, but certainly needs to be monitored as a potential catalyst for a rally," wrote Judith Ganes, a soft-commodity analyst at J. Ganes Consulting, LLC.
Others said all indicators still suggested the crop would be big in West Africa, while demand from Asia and Europe so far remains lackluster.
Unless there's a supply disruption, "I don't see any catalyst right now that can really turn the market around," said Nicholas Gentile, head trader at Nickjen Capital. He still expects the cocoa market to show a 200-ton surplus this year.
In other markets, raw sugar for March was down 0.3% to 20.70 cents a pound, arabicacoffee was 0.2% lower to $1.4925 a pound in the March contract, frozen concentrated orange juice futures for March lost 0.8% at $1.8310 a pound and March cotton added 0.3% to 72.52 cents a pound.
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(END) Dow Jones Newswires
January 13, 2017 12:08 ET (17:08 GMT)
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