20000310

CSCE cocoa recoups early losses to close higher

NEW YORK: CSCE cocoa futures crept steadily higher throughout on Wednesday's session to finally settle just under the day's peak, having come under early pressure from trade and speculative selling, traders said.

"The market does find hedging here in the morning and the standard call has been $10 lower on London. Then as the day goes on, it doesn't skyrocket, but it's steady," one broker said.

Active May settled at $862 a tonne, $3 firmer, after trading $865-841. Spot March added on $10 to $829, and the rest rose $4, with July closing at $885 after trading $890-864.

Bean prices once again dropped when the market opened, in line with lower prices in the London cocoa market, traders said.

"I think there's been a bit of Far East price fixing around, both yesterday and today. Ghana sold quiet a clip of cocoa last week, estimated between 40,000 and 45,000 tonnes," one senior trader said.

Traders and brokers said that further speculative buying and short covering, coupled with light industry interest, allowed the market to continue on its slow, but steady path higher.

"I'm very satisfied with the performance," one trader said.

"It seems to me that if they could bust through that high in London, that might get things going, but manufacturers really aren't chasing it," another broker said.

Participants were waiting to see the latest arrivals figures from the top world cocoa producer Ivory Coast, although there is more and more doubt regarding their accuracy.

"Most shippers (European and American) who I speak to seem somewhat incredulous with the numbers. They all seem to think they're too high," the senior trader said.

Cumulative arrivals to Ivory Coast ports as of Feb 27 totalled 1,023,500 tonnes, with a weekly figure of 23,500 tonnes, compared to 910,000 tonnes by the same time last year.

High arrival figures compared to previous seasons and expectations of a larger-than-expected crop in 1999/2000 of up to 1.3 million tonnes have been pressuring futures prices.

London's LIFFE cocoa ended weaker but above lows on Wednesday as short-covering and light industry interest kept prices underpinned after earlier origin selling.

Active May last traded six pounds lower at 639 pounds a tonne having moved between 648-632 pounds a tonne.

CSCE volume was estimated at 7,295 lots, compared to Tuesday's official tally of 12,189 lots.

Traders pegged support in CSCE May at $835, then $815-10, while nearby resistance was seen at $867, with "very good resistance" seen coming in at $882-95.

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