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CSCE cocoa ends mostly higher in low volume trade

NEW YORK: CSCE cocoa futures settled firmer on Friday for the third straight session when pressure from early arbitrage and local selling eased, allowing a modest recovery, dealers said.

"The activity today was mostly technical and I'm looking basically at an improving chart pattern, but there's not any big volume to back it up," one New York-based trader said.

May settled at $815 a tonne, up $6, after trading $818-800. Spot March, under delivery since Tuesday, slipped $1 to $780 and the rest rose $6-8.

Bean prices slithered down just after opening -- coming under fire from local and arbitrage sales -- to test support in the benchmark contract at $800 a tonne.

"The locals were long on the opening and they liquidated some positions and that shook out some weak longs to $800," one trader said. "Arbitrage selling was one of the reasons why the market failed initially. (It) kept New York in check."

Prices were able to recover as speculative and then fund buying propped the market up.

"We haven't had the daily hedge pressure to keep the market down at those (last week's) levels and we've been able to work our way back up to a level which is stabilising around $800," one floor trader said.

Volume was very thin in the New York cocoa market on Friday, which will be closed Monday in observance of Presidents Day. Business will resume as normal on Tuesday.

Volume was estimated at 3,585 contracts versus Thursday's turnover of 7,924 contracts.

LIFFE cocoa ended slightly higher on Friday as structural trading remained the key feature of business. Active May settled at 579 pounds a tonne, up four.

Traders pegged support in May at $775, with nearby resistance at $823-25, then $834 and $848.-Reuters