DJ ICE Cocoa Review: Falls On Increased Crop Prospects
DOW JONES NEWSWIRES


Cocoa futures for September delivery fell on speculative fund selling linked
to ideas of increased output from the main West African growing region.

Nearby September cocoa lost $107, or 3.4%, on Friday, to settle at $3,006 a
ton on ICE Futures U.S. in New York.

Traders cited favorable growing weather for the upcoming main crop as
providing selling interest in cocoa.

"Production is definitely rebounding. We rallied [earlier in the week], and
that's been met by a wall of selling," said James Cordier, analyst and
president of Liberty Trading Group in Tampa.

While West African cocoa production has fallen in recent years due to a lack
of investment in the sector, poor yields and the relative popularity of
alternative crops such as rubber trees, favorable weather conditions are seen
boosting the upcoming main crops in Ivory Coast and Ghana, a broker said.

Cocoa trading resembles a broken record as futures reach highs around
$3,100-$3,200 and then decline--a pattern the market has followed now for
several months, Cordier said.

ICE cocoa also was pressured by a weaker-than-expected report on U.S.
employment, which caused traders to pare riskier commodity bets.

Nonfarm payrolls fell by 131,000 in July, the Labor Department said, versus
pre-report expectations for a loss of 60,000 jobs. The news pressured the U.S.
dollar and took equities lower.

Cocoa is considered a luxury item, one that consumers may do without during
times of economic strife. The weak data cast doubt on whether recent strong
demand for cocoa and chocolate can be sustained.

London cocoa futures also fell on the prospect of larger West African crops.
September cocoa traded on NYSE Euronext's Liffe lost GBP99, or 4.3%, to settle
at GBP2,193 a ton, after hitting a two-month low of GBP2,179 earlier in the
session.

Open interest in ICE cocoa rose 880 to total 125,130 contracts, the exchange
reported.

Volume is pegged at a strong 34,894 contracts, with 142 calls and 83 put
options traded.

ICE Change Range
Sep $3,006 dn 107 2,976 - 3,132
Dec $3,035 dn 103 3,005 - 3,153