Submitted by Fox First at Ten on October 24th
By SANDY SHOREAP Business Writer
The buzz about cocoa is starting to fade as new production from African nations is adding to already plentiful supplies.
Cocoa for December delivery fell $99, or 4 percent, Wednesday to end at $2,399 per metric ton. Oil, gold and copper also dropped because of mounting concerns about slower global growth.
The price of cocoa rose nearly 6 percent last week as traders speculated that demand could improve because of signs that the U.S. economy may be getting healthier.
Now, there are reports of good production in the Ivory Coast and Nigeria while the harvest is progressing in West Africa, said Jack Scoville, vice president of Price Futures Group. Traders also speculated about whether demand will diminish in financially troubled Europe, which is home to the biggest number of chocolate consumers.
In other trading, most commodity prices were lower after more disappointing economic news from Europe outweighed a positive report on China's manufacturing sector.
Markit, a financial data company, said its purchasing managers' index for the manufacturing and services sectors of the 17 countries that use the euro currency fell in October to its lowest level since June 2009.
HSBC Corp. said preliminary results for its October purchasing managers' index in China rose to a three-month high of 49.1 points from 47.9 in September. The rate must be above 50 to indicate growth.
Slower growth means less demand for a wide range of commodities, from oil and copper to agricultural products.
In December contracts, gold fell $7.80 to finish at $1,701.60 per ounce, silver dropped 17.3 cents to $31.62 per ounce and copper was essentially unchanged, down 0.15 cent at $3.568 per pound. December palladium fell $1.10 to $592.75 and January platinum dropped $12.90 at $1,562.70 per ounce.
Oil prices fell after the government said crude inventories increased or 1.6 percent, last week. At 375.1 million barrels, the nation's oil inventory is 11.1 percent above year-ago levels. Analysts expected a much smaller weekly increase in supply.
Benchmark oil dropped 94 cents to end at $85.73 per barrel. Heating oil fell 0.4 cent to $3.0394 per gallon, wholesale gasoline fell 0.2 cent to $2.603 per gallon and natural gas dropped 8.5 cents to $3.45 per 1,000 cubic feet.
In agricultural contracts, December wheat rose 15.25 cents to finish at $8.84 per bushel, December corn fell 1.5 cents to $7.545 per bushel and November soybeans gained 17.25 cents to $15.705 per bushel.
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