London coffee futures gained for the third straight session and hit a three-week high after a spate of late fund buying boosted prices on Tuesday, traders said. "New York hit a stop and then we saw fund buying," one trader said. "Funds were buying in London and in New York and we saw some good volume." Liffe's benchmark March position rallied $13 to $752 a tonne after turning over 4,310 lots in a 758-733 band, reaching the highest price since 759 touched on January 5. Total volume reached 8,883 lots.
Other traders said industry interest had helped support London prices, which had simmered around Monday's close for most of the session.
"There's industry buying and origin selling. London has held on good industry interest, particularly on May and July," another trader said.
Front-month January surged $19 to close at $729 a tonne on turnover of 31. May ended $13 higher at $775 a tonne and volume of 2,898.
New York's arabica March position gained 0.95 cents to 105.60 cents a lb.
COCOA EXTENDS TWO-WEEK HIGH: London cocoa futures extended a two-week peak on Tuesday as supply worries started to push prices up over a recent range, floor sources said.
Liffe's benchmark March closed at 843 pounds a tonne, after touching a high of 847, a price not matched since January 6. The day's low was 835 while turnover was 4,891 lots. Overall volume reached 7,734 lots.
Cocoa futures have been range-bound recently as fund pressure balances supply worries, leaving many players sidelined as they wait for fundamental news or technical signals to provide some momentum.
Cocoa prices are expected to make strong gains in 2005 as production lags demand for the first time in three years and political instability in Ivory Coast aggravates supply worries, a Reuters poll showed on Tuesday.
London's benchmark cocoa futures are seen rising 8.3 percent to 913 pounds a tonne between the close of 2004 and the end of the first quarter and may gain 17 percent to 983 pounds by the end of the year - according to the median forecast of seven analysts and traders polled by Reuters.
Farmgate prices in Ivory Coast's cocoa regions were mixed in the week of January 17-23, data from the BCC marketing body showed on Tuesday.
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