London cocoa futures finished slightly higher on Thursday after a session of origin producer selling into fund short-covering, traders said. Most-active May ended at 922 pounds a tonne, up six pounds. It bottomed out at 907 and made an intra-day high of 930, just short of the previous session's three-month peak of 932. Turnover reached 8,545 lots from a sum of 17,413 lots.
"There's good volume...There's been a lot of short-covering in London," a trader said.
Dealer opinion on the potential for new highs varied, with some interpreting Monday's heavy fund buying session in New York as a sign large speculators have turned their attention to cocoa after a four-month buying spree on the coffee market.
The level of 930 on May is "pretty key" for a drive towards higher levels, according to the same trader. "I'd like to see that being broken in good volume, preferably by the end of tomorrow," he said.
Switch activity inflated volume, particularly on contracts further ahead, which finished five to six pounds higher.
September closed at 960 on volume of 2,300 lots while December concluded at 951 on turnover of 1,340.
The market remained wary of events in Ivory Coast, where a fresh outbreak of hostilities between rebels and pro-government militia helped trigger Monday's surge of fund interest in New York cocoa futures.
The threat of a return to the state of civil war that rocked Ivory Coast in 2002 and sent cocoa prices to a 17-year high comes just as the market prepares for a production deficit this year after a surplus the previous season.
Cocoa arrivals at ports in the world's top cocoa supplier were more than 10 percent lower by the end of February than at the same stage last season, with buyers and exporters eager for the mid-crop to boost supplies.
Arrivals at Ivory Coast's ports reached 876,980 tonnes between October 1, 2004 and February 27, 2005, compared with 984,551 tonnes during the same period of the 2003/04 season, according to an estimate by major exporters on Thursday.
Meanwhile, cocoa farmers set up blockades in parts of western and southern Ivory Coast to stop cocoa from getting to ports, but the strike action did not appear to have an immediate effect on the flow of beans.
Traders in London said the industrial action was unlikely to have any impact on the market as most of the main crop had already been shipped.
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