COMMODITIES : Cocoa Prices Dive on Reports of Big Sale

Cocoa futures prices plummeted Thursday on rumors that the Ivory Coast, the world’s largest cocoa producer, had sold up to 100,000 tons of cocoa beans after a two-month absence from the market.

On other markets, grains and soybeans finished lower; energy, livestock, meat and stock index futures advanced, and precious metals were mixed.

The Ivory Coast, an African nation that is world’s largest exporter of cocoa beans, withdrew from the cash market more than two months ago because prices were so low.

Prices subsequently rose more than $150, with the contract for July delivery of cocoa on the Coffee, Sugar & Cocoa Exchange in New York settling Wednesday at $1,685 a ton, compared to $1,507 a ton on March 15.

Rumors Thursday morning that the Ivory Coast had sold as much as 100,000 tons of cocoa to a consortium of trade houses sent futures prices tumbling as much as $100 during the session. The contract for delivery in July settled Thursday at $1,596 a ton, off $89 from Wednesday’s final price.

“Everybody understood that as soon as the Ivory Coast came out, the rally was going to end and we saw it today,” said Sandra Kaul, an analyst in New York with Shearson Lehman Hutton Inc.

Philipp Bros. Inc., one of the trade houses rumored to be among the purchasing group, would not comment on the rumors.

Grain and soybean futures finished lower on the Chicago Board of Trade, with wheat prices down sharply on concerns about increased production next year.

Weather Sways Market

The Agriculture Department approved a new wheat price-support program Wednesday that will allow greater wheat production next year, a prospect seen as strongly negative for prices, analysts said.

Mixed forecasts for weekend weather also pressured the markets, with most traders expecting significant rainfall before the end of the long Memorial Day weekend, said Walter Spilka, an analyst in New York with Smith Barney, Harris Upham & Co.

“The wheat crop is maturing and rain would be very helpful as the crop starts to ‘head’ out there,” Spilka said. “Heading” refers to a critical phase of the wheat-ripening process.

Soybean futures closed well above their session lows, an indication of the market’s resilience to bearish news, he said.

Wheat settled 4.50 cents to 10 cents lower, with July at $3.3675 a bushel; corn was 2 cents to 4.50 cents lower, with July at $2.1275 a bushel; oats were 0.75 cent to 1 cent lower, with July at $1.71 a bushel, and soybeans were 5 cents to 14 1/2 cents lower, with July at $7.54 a bushel.

Gasoline and heating-oil contracts posted strong gains on the New York Mercantile Exchange amid traditional pre-Memorial Day buying, analysts said.

The Memorial Day weekend marks the beginning of the summer driving season, when demand for gasoline typically rises, said Peter Beutel, an analyst in New York with Elders Futures Inc.

Meat Futures Advance

Some buying also was linked to the June 8 meeting of the Organization of Petroleum Exporting Countries, although Beutel said there was little chance of the OPEC ministers agreeing to production cuts.

West Texas Intermediate crude oil settled 17 cents to 20 cents higher, with July at $17.54 a barrel; heating oil was 0.58 cent to 0.88 cent higher, with June at 48.19 cents a gallon, and unleaded gasoline was 0.54 cent to 0.63 cent higher, with June at 52.35 cents a gallon.

Livestock and meat futures finished mostly higher on the Chicago Mercantile Exchange as cash and wholesale prices steadied after falling for several days, analysts said.

Live cattle settled unchanged to 0.45 cent higher, with June at 72.15 cents a pound; feeder cattle were 0.02 cent to 0.50 cent higher, with May at 80.97 cents a pound; hogs settled 0.20 cent lower to 0.33 cent higher, with June at 53.12 cents a pound, and frozen pork bellies were unchanged to 0.23 cent higher, with July at 53.40 cents a pound.

Gold finished nearly unchanged while silver advanced slightly in listless trading on the Commodity Exchange in New York.

Gold settled 70 cents lower to 70 cents higher, with June at $454.10 an ounce; silver was 1.6 cents to 1.8 cents higher, with May at $6.61 an ounce.

Stock index futures posted modest gains on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 1.60 points higher at 255.60.

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