Cocoa prices were dipping nearly 2.5% Tuesday on news of wet weather in the main growing region as well as ongoing concerns over reduced demand.
Contracts for July delivery of the beans were losing $44, to $1,844 a ton, on the New York Board of Trade.
"There is some concern about increased rainfall in West Africa, as it's beneficial for the main crop in 2007 and 2008," explains Rohit Savant, a commodities analyst at the specialty consulting firm CPM Group in New York.
Favorable weather conditions in Ghana and Ivory Coast, the two largest producing countries in the region, will likely lead to increased supply and so put more downward pressure on prices.
Also continuing to weigh on the minds of traders was news released Friday from the Chocolate Manufacturers Association that first-quarter U.S. cocoa grind figures were down almost 7% when compared with the same period a year ago. Savant says it's reflective of a drop in demand for beans. Other indicators such as volume of cocoa butter and chocolate liquor (melted) were off also.
Shares of confectioners
were lower by 0.4% and 1% respectively in recent trading.
Turning to the base metals, copper contracts were losing 6 cents at $3.59 a pound on the Comex division of the New York Mercantile Exchange on news that the sales of existing homes fell much more than expected in March. Copper is used for electrical wiring in the construction of new dwellings, an important piece of the global demand equation for copper. For that reason, traders play close attention to the overall health of the housing sector.
PowerShares DB Base Metals
exchange-traded fund, which tracks copper as well as other industrial metals, was losing 0.2%.
Elsewhere, diversified miner
reported its copper and zinc production ballooned in the March quarter vs. the same period a year earlier, up 22% and 26%, respectively. Nickel output was up 14%, aluminum production was roughly flat, while amount of lead recovered was off 8%.
Canadian aluminum producer
reported first-quarter earnings of $1.60 a share, beating the consensus of $1.47 and up from $1.21 a year earlier. The news sent the shares up 4.25%, to $57.16, in recent trading.
In precious metals, gold futures were losing $2.90 at $691.30 an ounce, and silver was slipping 11 cents at $13.94 an ounce, both on the Comex.
The exchange-traded funds were moving in line with the futures, with
streetTracks Gold Shares
down 0.8% and the
iShares Silver Trust
Elsewhere, the European Central Bank says it sold 281 million euros of gold and receivables last week, or slightly over 17 tons, up from 2 tons in the prior period.
In the precious metals patch,
says the head of its Indonesian operation has been cleared of criminal charges of polluting the environment at its mining operations in the province of Northern Sulawesi. The news helped boost the stock, which was up 0.5% in recent action.