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CSCE cocoa ends sharply up, May at four-month high

NEW YORK: CSCE cocoa rallied late Wednesday to end sharply higher across the board, as heavy speculative buying vaulted active May to its highest levels in more than four months, traders said.

Many traders had expected a downward correction today, following six consecutive sessions of gains, but a dearth of selling interest kept the early losses limited.

Refco analyst Ann Prendergast said Ivory Coast arrivals were dwindling, and this, coupled with the prospect of the Ivory Coast withholding mid-crop cocoa, provided support. She also noted the stock-to-consumption ratio has fallen recently.

May cocoa closed $34 higher at $1,344 per tonne, its highest settlement since November 29, after trading from $1,348 to $1,301. Second-month July ended $28 better at $1,357, while the back months settled $28 to $20 higher.

The market has steadily recovered since the May contract slid to a lifetime low of $1,205 on March 14 on news of a record 1995/96 Ivorian crop.

Traders are awaiting Thursday's European cocoa grind data, which are expected to show continued strong demand. Industry sources forecast a 5 to 10 percent rise in the U.K. grind, while the German grind was expected to be little changed.

Volume was heavy at an estimated 18,832 lots, with much of the activity late in the day.-Reuter