20000108CSCE cocoa ends higher in technical selling

NEW YORK: CSCE cocoa futures settled higher Thursday after some late local shortcovering brought prices back into positive territory when an earlier speculative long liquidation dried up, brokers said.

"It was a moderately quiet day. There was a lot of technical and producer selling in the market both in London and New York today," a trader said.

Active March ended up $10 at $841 a tonne after trading $847-$824. May gained $9 to end at $865 and the rest rose $8-$9.

Bean prices fell shortly after opening and spent most of the session trading lower, in a tight range, until the last few minutes of the day when local short covering came in, dealers said.

"The market was trapped into a range. Overhead resistance was coming from speculative liquidation and origin selling and support was coming from trade and industry scale down buying," a dealer said.

LIFFE cocoa ended above the day's lows Thursday, edging away from December's contract low as industry buying emerged to prop up a market depressed by speculative selling and a strong pound. Benchmark March LCCHO closed at 557 pounds a tonne, down three pounds, after trading 557-549 pounds.

Technically, chartists pegged resistance for March CSCE cocoa at $850, while nearby support was seen at $800.

Volume reached an estimated 5,188 lots against the previous official volume of 5,846 lots. Call volume touched 2,517 lots while put volume amounted to 724 lots.

France's Development Aid Agency is putting all new funding for the Ivory Coast on hold, following a decision by new ruler General Robert Guei to suspend foreign debt service payments, a government source said Thursday.

Ivory Coast's new military ruler, General Robert Guei, toured military camps on Thursday reassuring troops about pay and the political transition after rumours that soldiers were on the streets and shooting in different barracks on Wednesdaynight.

External debt repayments had been temporarily suspended to allow payment of salaries to civil servants and army soldiers of the world's number-one cocoa growing country.

In other fundamental news, no rain fell in Ivory Coast's main cocoa-growing areas of Daloa and Gagnoa in the last 10 days of December but soil humidity was still adequate for cocoa pod development, official weather data show.

"Despite the coup and all the political problems, there'sbeen no evidence of a slow down in the moving of cocoa," one dealer said. "Shipments continue and people in Ivory Coast continue their business as usual."

The CSCE is a subsidiary of the New York Board of Trade.-Reuters