Cocoa rally takes breather as risk-off mood sours sentiment
Cocoa prices retreated after rallying to a 12-year high on supply concerns in key growers in West Africa.
New York futures slipped as much as 2.3% to $3,671 a ton after a five-week run of gains fueled by concerns over lower production in Ivory Coast and Ghana that will likely tip the cocoa market into a third year of deficits.
That rally had propelled futures into overbought territory, a signal that suggests that prices are vulnerable to a pullback. Cocoa’s 14-day relative-strength index was in that zone for three sessions last week.
The risk-off mood across broader markets weighed on soft commodities prices amid worries that interest rates will remain high for longer than previously expected.