Speculation about investors holding record bullish bets beginning to sell futures prompted cocoa futures to drop to their lowest value in seven days on Monday, according to Bloomberg.
Thus far this year, the soft commodity has gained about 19 percent on commodity markets. But since touching its top value of the year on October 22, cocoa futures have fallen about 4.6 percent.
"A classic break-out failure has occurred at the critical $2,700-a-ton resistance area, offering a major technical sell signal and the opportunity for a crash-down kind of market," states a Sunday report authored by president Shawn Hackett with Hackett Financial Advisors in Boynton Beach, Florida, according to Bloomberg. "I expect prices to move down to $2,300 in the months ahead."
At 9:46 a.m. on Monday, cocoa futures dove 2.13 percent, a $57 drop to $2,614 per metric ton.
Reuters reports Ivory Coast, the globe's top grower of the soft commodity, last week remanded 15 ex-officials with the cocoa sector to prison for 20 years. They also were hit with strong financial penalties as part of the nation's effort to clean the industry tainted under the rule of former national leader Laurent Gbagbo.
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