New York cocoa up on arbitrage, fund buying before data

CSCE cocoa futures finished higher on Thursday for the second straight day on arbitrage and speculative fund buying ahead of the release of the quarterly grind data for the US chocolate industry, brokers said.
"Cocoa rallied because weakness in the dollar brought in arbitrage buying into our cheaper market and the stronger structure (spreads) in London helped," said one trader.
Brokers said some new commodity funds entered the market from the long side for the first time today.
The active March cocoa contract tacked on $46 to close at $1,678 a tonne, just off the top of a $1,647 to $1,683 trading range.
Volume expanded on Thursday ahead of Friday's release of the grind figures for the US, which is an approximate measure of consumption according to analysts.
The US cocoa grind for the fourth quarter of 2003 is seen flat to up 3 percent, traders and analysts said on Wednesday.
The report will be released before on Friday's open. "I don't think the grind will have much impact on the market unless it is up 10 percent or down 5 percent," said one broker, suggesting that the marketplace already discounted the number.
May cocoa rose $42 to close at $1,664 and the back months settled $34 to $42 higher. "Some of the die-hard bears are starting to give up, buying the market outright," the trader added.
Estimated volume rose to 8,923 lots versus a 4,689-lot pace on Wednesday. On Thursday's turnover included 2,075 switches.
In the nearby option pit 614 calls and 265 puts traded.
On the fundamental front cocoa beans declared for export by shippers at Ivory Coast's main port of Abidjan since the start of the 2003/04 (Oct-Sept) season reached 330,817 tonnes by January 18, official data showed on Thursday.
Ivory Coast is the world's top cocoa producer. CSCE certified warehouse stocks inched up to 1,540,982 60-kg bags on January 22 from 1,539,650 on January 21.
Technical analysts pegged support for March at $1,647 then $1,635 with resistance at $1,685 a tonne and then $1,698. CSCE is a subsidiary of the New York Board of Trade.