COMMODITIES : Cocoa Futures Dive on Rumor of Selloff

Cocoa futures prices dropped sharply Friday on unconfirmed rumors that the Ivory Coast had sold some of the 135,000 metric tons it has been withholding from the market in hopes of selling at higher prices.

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

The Ivory Coast, in west Africa, is the world’s largest cocoa producer and exporter, accounting for about one-third of the 1.9 million metric tons of cocoa beans produced in the 1986-87 season.

Its production for the current season, which ends Sept. 30, is estimated at 620,000 metric tons, but it has sold only 485,000, according to a recent research report from Shearson Lehman Hutton.

Analysts said that for the past several months the Ivory Coast has been holding out for higher prices for the remainder of its 1987-88 cocoa.

“They have made one or two sales where dealers were prepared to pay their high asking prices,” said Arthur Stevenson, an analyst in New York with Prudential-Bache Securities.

But harvesting of the new crop will begin late next month or early in October, and “their warehouse space is finite, so a substantial amount of this will have to come on to the market,” Stevenson said.

Unconfirmed rumors that the Ivory Coast had sold some of its cocoa on Thursday caused panic selling of cocoa futures Friday on the London Terminal Market, where prices plunged the permitted daily limit.

Soybean Futures Slip

The price drop was not as steep on New York’s Coffee, Sugar & Cocoa Exchange, but new life-of-contract lows were set for all delivery months.

In New York, cocoa settled $31 to $50 lower, with the contract for delivery in September at $1,321 per ton.

Grain and soybean futures closed mostly lower on the Chicago Board of Trade after early excitement about a wheat offer to China faded into a lackluster session.

The Agriculture Department’s announcement late Thursday that it had targeted China for sales of 2 million metric tons of subsidized U.S. wheat gave the grain markets an early boost.

But after that, “there wasn’t a lot of new news and the market kind of slipped away,” said Jerry Gidel, a grain market analyst with G. H. Miller, a Chicago-based commodities trading division of British-owned LIT America.

Wheat and corn futures finished slightly lower but soybeans posted steeper losses on speculation that Friday’s light showers and cooler temperatures would benefit the struggling Midwestern soybean crop. Afternoon readings in the region were mostly in the 70s, but temperatures in the 90s were expected to return early next week.

Wheat settled 0.5 cent to 4 cents lower, with September at $3.9175 a bushel; corn was 0.5 cent to 2.5 cents lower, with September at $2.8725 a bushel; oats were 2 cents to 6.5 cents lower, with September at $2.59 a bushel, and soybeans were 12.25 cents lower to 2 cents higher, with August at $8.695 a bushel.

Cattle futures finished mixed on the Chicago Mercantile Exchange amid profit taking and expectations of declining cash prices next week, said Thomas Morgan, president of Sterling Research Corp. of Arlington Heights, Ill.

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