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CSCE cocoa ends at 7-week high- specs, trade buy

NEW YORK: CSCE cocoa futures closed higher on Tuesday, settling just off the session's peaks, when prices were picked up from the lows by speculative and trade buying, brokers and traders said.

Cocoa futures prices have shown a tendency to rise over the past few sessions, as the main West African crop season draws to a close and arrivals of cocoa beans into Ivory Coast ports start to diminish.

"You saw speculative and trade buying, with manufacturer buying at the bottom. A lack of selling helped," one floor trader said.

Active May CCK0 settled at $883 a tonne, its highest level since January 21 and $14 firmer, having traded between $886 and $866.

Spot March, which expires on Wednesday, gained $20 to $880, whilst the rest of the board increased by $15 to $18, with July CCN0 cocoa closing at $909, up $17, trading $910-892.

Bean prices opened lower than market expectations, but saw some light speculative buying in early activities, although volume was extremely thin, floor traders said.

Trade selling touched off some stops in active May when it failed to hold at the previous day's high, pressuring prices down to their intraday lows.

But the market regained momentum in late trading, gaining support from manufacturer buying at the lows, coupled with speculative and trade buying and aided by a lack of selling, one trader said.

In industry news, the European Union's long-running row over chocolate is heading for a finish, ending a 25-year old wrangle that has split the EU.

Euro MPs will vote on Wednesday on allowing chocolate to be made using vegetable oils, guaranteeing the type of high milk content chocolate made in Britain will be available throughout the EU under the "family milk chocolate" label.

London's LIFFE cocoa ended firmer but off highs, after an earlier spike on speculative short covering ran into producer sales. May LCCK0 last traded 17 pounds higher at 647 pounds a tonne, having moved between 654-639 pounds a tonne.

Volume traded on the CSCE Tuesday was estimated at 9,639 lots, compared to Monday's official tally of 4,969 lots.

Traders pegged support in CSCE May at $860, then $850, followed by $841-40, whilst nearby resistance was seen at $900.

"$900 would certainly be the next logical level to shoot for in terms of resistance, but my hunch is that we're going to go through that, because the market is starting to build a little bit of momentum," Scott Meyers, technical analyst with Pioneer Futures said.

"Although I was not fundamentally prepared to be believe that this was possible right now, the technicals probably could take it a little bit further." -Reuters