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CSCE cocoa continues to correct, edges higher

NEW YORK: CSCE cocoa futures inched higher at the close on Wednesday, in what traders described as a dull, low volume session as the market continues to find its footing after recent declines.

Active May settled at $871 a tonne, $3 higher, having traded between $875 and $856. Second month July cocoa closed at $901, up $6, trading $904-$885. The back months gained $4 to $7 a tonne.

"It was a dull day, with volume at around 5,900. If you take out the switches, you're left with only about 4,000 lots traded. Not much," one floor trader said.

New York cocoa beans were pushed down to intraday lows in early activities as they continued to come under pressure from speculative long liquidation, traders said.

"The only positive thing about the day was that London closed at the day's high," one floor broker said. "And we (New York) closed better than last night."

Trade buying into the dips and arbitrage buying allowed the market to rise, attracting speculators to come back and buy later on in the day, the trader said.

LIFFE cocoa ended around day highs on Wednesday, getting a boost from short-covering as well as earlier sterling weakness against the dollar.

Active July closed 12 pounds higher at 635 pounds a tonne. Spot May was 14 pounds firmer at 630 pound, the intraday high.

In New York, pivotal support for the May contract is at $840-41 a tonne, whilst resistance is seen around $900-905, followed by $945-50..

Volume traded on the CSCE Wednesday was estimated at 5,803 lots, compared to Tuesday's official tally of 13,354 lots.

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