Cocoa Falls to 14-Month Low.

Cocoa futures fell to a 14-month low on speculation that rain in Ivory Coast, the world’s largest producer, will boost supplies and add to increasing stockpiles.

The U.S. National Oceanic and Atmospheric Administration forecast as much as 40 millimeters (1.6 inches) to 50 millimeters of rain in most of Ivory Coast and Ghana, the second-biggest cocoa grower, through March 11. In February, inventory in warehouses monitored by ICE Futures U.S. jumped 16 percent, the most in 11 months.

“Widespread rains have arrived in West Africa, providing welcome relief to cocoa producers,” Kona Haque, an analyst at Macquarie Group Ltd. in London, said in a report. “This is likely adding to the bearish near-term sentiment.”

Cocoa futures for May delivery slid 1.2 percent to settle at $2,056 a metric ton at 11:58 a.m. on ICE in New York, the lowest closing price since Jan. 6, 2012. The price has dropped 8.1 percent this year.

On March 1, the International Cocoa Organization projected a shortfall of 45,000 metric tons in the 12 months ending Sept. 30. Output in Ivory Coast was estimated at 1.47 million tons, down from 1.486 million tons a year earlier, and Ghana’s production will be 820,000 tons, the London-based group said.

The organization “appears to be confirming a suspicion that has already been simmering on the market for some time: the expectation, initially to be heard frequently, that the deficit could turn out to be around the 100,000-ton mark, is likely to have been pitched significantly too high,” Carsten Fritsch, a commodity analyst at Commerzbank AG in Frankfurt, said in a report.

(Source: Bloomberg)