The influence of magnetic fields on the deformation of spiral structure in a ferrocholesteric (a magnetic suspension based on a cholesteric liquid crystall) is analyzed on the basis of continuum theory. It is assumed that homeotropic boundary conditions are specified on the surfaces of the magnetic particles and that the diamagnetic susceptibility anisotropy of the matrix is positive. Two competing mechanisms in the orientation behavior of the ferrocholesteric are taken into account. The possibility of a ferrocholesteric-ferronematic phase transition (i.e., untwisting of the spiral structure of the ferrocholesteric) is discussed. The dependence of the critical field of the transition on the material parameters of the suspension is determined. The dipole regime in untwisting of the ferrocholesteric spiral structure is examined in detail.