DJ ICE Cocoa Review: Declines On Dollar Strength, Charts
DOW JONES NEWSWIRES


Cocoa futures for September delivery fell Wednesday in light trade amid
pressure from a strong U.S. dollar and chart-based selling.

Dollar strength is bearish for cocoa because it makes the commodity more
expensive for buyers in other currencies.

Most active September cocoa lost $42, or 1.4%, to settle at $2,935 a ton on
ICE Futures U.S. in New York.

Bearish sentiment in cocoa was also encouraged by a weak crude oil market and
mild losses in equities, which led to light speculative selling.

Now that cocoa has settled down after the huge delivery in the London market,
traders have resumed the market's downtrend. Cocoa has settled back into its
trading range, albeit at the lower end, with a lack of fresh news and
summertime doldrums weighing on futures.

"Despite the news we had a couple days ago about the huge delivery in London,
this is a slow time of the year for the market," said Boyd Cruel, senior softs
market analyst at Vision Financial Markets in Chicago.

While continued chart-based selling develops near the $2,900 level on
September, the market is expected to see solid support, he said.

On Wednesday, September held nearby chart support at the June 22 low of
$2,918, helping to prevent further losses.

If cocoa violates $2,900 support, however, bearish traders will next target
$2,794, said Cruel.

The market is also suffering as traders with long bets continue to exit those
bullish positions.

Cocoa arrivals in Brazil climbed to 80,449 bags in the week through July 18,
from 70,068 bags the previous week, the Commercial Association of Bahia said
recently. While arrivals are beginning to increase, they remain behind the pace
of recent years. Cocoa bean volumes are expected to increase further in the
coming weeks, said Thomas Hartmann, an analyst with the association.

Conditions in top grower Ivory Coast remain quiet, now that the mid-crop
harvest is essentially complete and as the coming main crop matures on the
trees.

London cocoa futures also fell following the weakness on ICE. September cocoa
traded on NYSE Euronext's Liffe lost GBP33, or 1.4%, to settle at GBP2,960 a
ton.

Open interest in cocoa fell 1,383 to total 125,927 lots, ICE reported.

Futures volume is pegged at 8,947 lots, with 1,787 calls and 934 put options
traded.

ICE Change Range
Sep $2,935 dn 42 2,924 - 3,007
Dec $2,960 dn 42 2,950 - 3,030
* ICE settlements in dollars per metric ton with intraday range.