Cocoa Drops Most in Two Weeks as Speculators Exit

Cocoa in New York fell the most in two weeks, ending a three-session rally, as speculative buying dwindled, the dollar rose and concerns mounted that the economic recovery may falter. Coffee declined.

The dollar gained against the euro for the first time in four sessions after the finance ministers of Germany and France ruled out a decision today on helping Greece to narrow its budget deficit. Concern that the situation in Greece may spread in Europe has dimmed the economic outlook. The Reuters/Jefferies CRB Index of 19 raw materials fell for a sixth straight session.

“Currency-connected selling pressure” pushed cocoa down, said Frank Pavilonis, a Lind-Waldock senior market analyst in Chicago. “Doubts about the macroeconomic recovery and rising supply, obviously that’s going to be bearish for cocoa.”

Cocoa futures for May delivery fell $54, or 1.8 percent, to $2,866 a metric ton on ICE Futures U.S., the biggest drop for a most-active contract since March 1. In the previous three sessions, the commodity climbed 4.2 percent.

Source : Bloomberg