CSCE cocoa futures dropped to the downside on Wednesday for the third straight day, as light producer offers and arbitrage selling overcame limited industry and trade buying, brokers said.
"Today's move down was a repeat of yesterday, with some origin selling capping the upside and the trade and industry waiting for breaks under $1,600 to do some buying," said a broker for a cocoa merchant.
On Wednesday the key March cocoa contract fell $33 to close at $1,608 a tonne, with a $1,586-$1,619 range.
From the $1,698 a tonne high set on Friday, the March contract has corrected $112 to Wednesday's intraday low of $1,586.
"Unless people get spooked again, March should trade down to the $1,500 area," said another broker.
May cocoa slipped $34 to end at $1,610 a tonne and the back months finished lower by $35 to $38 a tonne.
Estimated volume picked up a tad to 6,107 lots on Wednesday from the 5,460 lot pace on Tuesday. Approximately 1,200 switches helped on Wednesday's turnover, dealers said.
In the option pit 684 call options traded and some 374 puts.
In fundamental news, cocoa bean imports into the United States slowed to 27,754 tonnes in November 2003, down from the 28,338 tonnes imported in October 2003 and off the 39,534 tonnes in November 2002, according to the latest data from the US Commerce Department.
In other news, migrant workers in Ivory Coast's cocoa-rich west said they were afraid to tend the cocoa farms in case ethnic clashes which have killed around 20 people in two weeks exploded again.
Civil war in the West African nation broke out after a failed attempt to remove President Laurent Gbagbo in September 2002.
The war was declared over last July, but the country is still divided between a rebel-held north and government-held south and ethnic tensions have only sharpened.
Technicians pegged support for March at $1,580, then $1,550, with resistance at $1,641 a tonne and then $1,685.
CSCE certified warehouse stocks fell to 1,415,847 60-kg bags on January 14 from 1,420,802 on January 13. CSCE is a subsidiary of the New York Board of Trade.