Cocoa #7 Futures Market News and Commentary
Dec ICE NY cocoa (CCZ23) on Monday closed -86 (-2.40%), and Dec ICE London cocoa #7 (CAZ23) closed -43 (-1.42%).
Cocoa prices Monday posted moderate losses, with NY cocoa falling to a 4-week low. Monday's rally in the dollar index (DXY00) to a 6-½ month high undercut cocoa prices. An improved outlook for the Ivory Coast's main crop is also weighing on cocoa prices after reports from Ivory Coast farmers that recent rain has produced new flowers and pods on cocoa plants. London cocoa recovered from its worst levels Monday on weakness in the British pound (^GBPUSD), which fell to a 5-3/4 month against the dollar. The weaker pound boosts cocoa, which is priced in terms of sterling.
An excessive long position of NY cocoa futures by funds could fuel long liquidation pressures after last Friday's weekly Commitment of Traders report showed funds increased their net long NY cocoa positions by 559 in the week ended September 19 to 79,541, a 9-year high.
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