CSCE cocoa falls in switch-dominated trade

CSCE cocoa futures ended lower on Wednesday in another session in which the main feature was switch activity with the approach of first notice day for the March contract on Friday, brokers said.
"It was just some more position rolling out of March cocoa before on Friday's first notice day. That was about it today," said one dealer.
The key March cocoa future settled down $11 to settle at $1,519 a tonne, after moving from a low of $1,508 to $1,532.
On Friday is first notice day for the March futures, so speculative players reposition their holdings in futures, rolling out of spot month positions into another delivery month, to avoid taking actual physical delivery of cocoa when the delivery begins.
May cocoa lost $9 to finish the day at $1,526, while back month contracts ended mixed, from down $8 to up $2 a tonne. "The market seems to be trading in a range right now, with May cocoa holding at $1,500.
It looks constructive for a possible advance, once first notice day is over on Friday," said one analyst.
Improved crop forecasts from top West African growers Ivory Coast and Ghana may indicate a shift to a global surplus of output versus consumption, analysts said, which in turn may keep futures on the defensive.
Fundamentally, rains in Ivory Coast's cocoa growing regions were poor in the first 10 days of February as the dry Harmattan winds swept over the country, data showed.
But local analysts said the development of the 2003/04 mid-crop (Apr-Sept) was not threatened for the moment because the wind was not strong enough to disturb the development of cocoa pods already on trees.
Estimated final volume eased to 11,940 contracts on Wednesday from Tuesday's official count of 16,680 lots. In the options pit, 727 calls and 229 puts traded.
CSCE certified warehouse stocks of cocoa slipped to 1,609,058 60-kg bags on Wednesday from 1,627,304 on Tuesday.
Chartists pegged support for March at $1,508 and then $1,497, while resistance was seen at $1,536 and then $1,550 a tonne.
CSCE is a subsidiary of the New York Board of Trade.