Concerns about a new coronaviruses variant fueled a selloff across financial markets, as soft commodities from cocoa to cotton fell and Paris wheat futures fell.
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The variant identified in South Africa could hurt the global economic recovery, as most commodities were under pressure. Cocoa fell by as much as 3.1% in New York -- nearing a four-month low as U.S. markets reopened after Thanksgiving. Arabica coffee pulled back from a decade high and cotton dropped too.
French wheat fell from near a record in terms of grains, while Chicago futures will resume trading later Friday.
The markets are suffering from a big bout of risk aversion, according to Michael McDougall, managing director at the brokerage Paragon Global Markets in New York.
Cocoa was last down 2.9% at $2,440 a ton. The favorable rains that have boosted optimism for a large crop in top grower West Africa have pressured prices. Continued demand should lift cocoa prices, Fitch Solutions said in a report.
In other soft commodities, arabica coffee dropped 1.5% to $2.465 a pound, raw sugar fell 1.8% and cotton fell as much as 3.7%. Researcher Cotlook cut its deficit estimate for the 2021 -- 22 season on bigger production in West Africa and Turkey.
Wheat prices recently rallied because of concerns that weather threats to Australia's harvest may exacerbate a global shortage as consumption remains strong. Farm adviser Agritel said that the threat from the latest Covid 19 variant has caused fears about grain demand next year.
Milling wheat was down 2.3% at 301.75 euros $340 a ton in Paris, a 2.3% decline from a week ago.
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