US cocoa futures settled a shade lower on Monday, after touching a one-month high, on pressure from weak sterling and profit-taking during a quiet session, traders said. "In the short term, you did get a little bit of profit-taking on the upside," one trader said.
The New York Board of Trade front-month July contract inched $6 lower to close at $1,952 per tonne. Key September futures fell $4 to $1,951, with trades from $1,947 to $1,974, a high dating back to May 25. The rest ranged from $3 to $4 lower.
The September contract on the Intercontinental Exchange NYBOT electronic platform was $9 lower at $1,946 at 12:57 pm EDT (1657 GMT), trading from $1,946 to $1,975. The rest ranged from $6 to $9 lower, with the exception of July, which was up $7.
Electronic trading ends at 3:15 pm Sterling fell below the previous session's close versus the dollar on Monday, after climbing above the psychologically important $2 level for the first time since May 1 as investors anticipated a British rate hike in July, rather than August.
The weak pound attracted some arbitrage cocoa selling in New York, pressuring the market, dealers said. Market sources said there was talk that independent analyst Hans Kilian forecast No 2 cocoa producer Ghana's current mid-crop at around 90,000 tonnes in a report late last week. The projection was not confirmed.
The International Cocoa Organisation projected Ghana's 2006/07 mid-crop around 80,000 to 100,000 tonnes, compared with almost 100,000 tonnes in 2005/06. The Liffe benchmark September cocoa futures contract closed 2 pounds lower at 1,066 pounds per tonne, in tight dealings from 1,064 pounds to 1,078 pounds.
Meanwhile in Ivory Coast, the No 1 grower, cocoa arrivals at ports in from October 1 to June 24 reached about 1,129,000 tonnes, compared with 1,249,127 in the same period a year ago, exporters said on Monday. Good rainfall continued in Ivory Coast's cocoa growing regions over the past week, farmers said on Monday, providing moisture for trees that have begun to produce flowers ahead of the next main crop season.
The tropical country is currently in its rainy season and showers have been regular for around three months, dousing land that had been left arid after a long spell of hot, dry weather between January and March, which cut the current crop's output.
In Nigeria, the fourth biggest cocoa producer, cocoa trading restarted slowly on Monday after unions called off a four-day general strike that had closed the country's general cargo ports, exporters said. NYBOT estimated open-outcry volume around noon at 1,602 lots, compared with 826 contracts traded in open-outcry on Friday, when 5,117 contracts traded on ICE. Open interest climbed 1,068 lots to 142,993 as of June 22.