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Pastimes : The New Qualcomm - write what you like thread. -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (5424)	10/20/2002 5:24:01 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 12231

Cocoa futures down "big time" on Friday : Wall Street Journal COMMODITIES Cocoa Contract Plummets $201 On Reports About Ivory Coast By CLAIRE GRIERSON OsterDowJones Commodity News NEW YORK -- Cocoa prices on the Coffee, Sugar and Cocoa Exchange on Friday recorded their largest one-day fall in more than 13 years. The third consecutive day of heavy selling came as the government of Ivory Coast, the world's largest cocoa-producing nation, accepted a rebel-signed cease-fire. The December contract settled down $201 at $1,910 a metric ton. The coffee exchange's parent, the New York Board of Trade, said this was cocoa's biggest single-day drop since its records began in 1989. Overnight reports that Ivory Coast President Laurent Gbagbo said he accepted a cease-fire signed by rebels lifted hopes for a return to peace after a bloody monthlong uprising that began Sept. 19 following an attempted coup d'état. This was the catalyst for the continued selloff. Speculators and commercial participants were again quickly disposing of futures they bought when the market was rising, as insurance against the potential threat to cocoa exports by the Ivory Coast tensions. Ivory Coast accounts for 40% of the world cocoa supply and, with its main crop harvest season just beginning, the unrest in the country came at a critical time. The market did attempt to rally as industry players bought futures when the December contract hit $1,983 a ton, but analysts said the might of the speculative sellers was too strong. "There were a lot of humbling moments for the bulls," said Al Abaroa, principal with Time Leverage Capital, a Miami brokerage firm. Since the uprising began, analysts said the tensions added more than 300 points of premium to prices in an already "overbought market," with the December contract hitting a 17-year high of $2,405 on Oct. 11. Mr. Abaroa said this premium had been an overreaction, and there was "no valid reason for the market to be in this rally, it was just panic bull buying." The cease-fire then has triggered a much-awaited correction, although the magnitude of the pullback took many participants by surprise. In the past three sessions, $388 has been erased from the December contract. With the commercial sector, which has been leading the monthlong rally, now taking a back seat, the market is seeing a "shift from an industry-led rally to an origin-led decline," said Luis A. Rangel, vice president with brokerage firm Fimat USA Inc. in New York. "Origin" is cocoa-market jargon for producer. Ann Prendergast, a soft commodities analyst with New York commission House Refco Inc., said the pullback represents the market's exhaustion after the upsurge from the coup attempt, but it isn't clear how far back it will go before traders decide it has reached the correct price for cocoa and buying begins again. Market participants have said the retracement in prices could extend back into the low $1,700-a-ton area. Mr. Abaroa said "$1,500 to $1,700 is a much more truthful range for cocoa prices." However, participants said that although a truce in Ivory Coast has been declared, continued uncertainty over the country can't rule out future attempts to rally again. In other commodity markets: COFFEE: CSCE arabica coffee futures fell as speculators continued to take profits, influenced by rain forecasts for Brazil after several hot, dry weeks. The December future dropped 3.70 cents to 62.60 cents a pound. The recent weather in Brazil had raised concerns about damage to next year's crop. WHEAT: Futures rose at the Chicago Board of Trade, propped up by recent technical strength from last week's large rally, people said. The December future rose seven cents to $4.13 a bushel. Analysts said the huge sale to Egypt earlier in the week continued to support prices. OIL: Gasoline futures surged more than a penny on concern over thinning supplies in the weeks ahead. Trade in crude oil and heating oil was choppy, as participants sought direction in the wake of the U.S. compromise on a Security Council resolution to disarm Iraq. France and Russia were considering the new U.S. proposal, with Moscow saying for the first time Friday that it might agree to military action if Baghdad fails to cooperate with weapons inspections. (See related article.) -- The Associated Press contributed to this article. Write to Claire Grierson at cgrierson@osterdowjones.com Updated October 20, 2002 4:41 p.m. EDT Copyright © 2002 Dow Jones & Company, Inc. All Rights Reserved.