London cocoa futures extended a six-week high on Thursday after funds swooped on US soft commodities markets in the previous session and set off technical signals to buy cocoa, traders said. Liffe's benchmark March traded in an 855-868 pound band and was 12 pounds stronger at 867 pounds a tonne by 1200 GMT. The day's high was the loftiest since December 17, when it hit 881 pounds. March futures posted volume of 1,743 lots from a total of 4,193.
"It has broken out of the 820-840 range so it's going higher on technicals and short covering," one trader said.
"It could snowball upwards. This is what happens, they cover shorts, go long and the market gets overbought."
September cocoa drew the second-highest volume, shifting 1,269 lots. It gained 10 pounds to hit 915, widening its premium over December to 21 pounds from as little as four pounds earlier this month.
December gained eight pounds to 894 on turnover of 433 lots.
NYBOT March cocoa rallied 3.1 percent to $1,575 a tonne on Wednesday after sterling's sharp rise against the dollar prompted fund buying.
One dealer said New York could push up towards $1,630-1,650 on Thursday but that the market could be over-inflated and fundamental worries said to underpin the rise were premature.
A global cocoa deficit of 144,000 tonnes is expected for the 2004/05 season, according to the median forecast of seven analysts and traders polled by Reuters on Monday.
Hopes for a quick breakthrough in Ivory Coast's political deadlock waned on Wednesday as key opponents to President Laurent Gbagbo stood by their demands and a row simmered over the rebuilding of the country's airforce.
COFFEE ENDS LOWER: Liffe coffee futures ended lower in thin volume on Thursday after ample supply kept prices under pressure and support from fund buyers failed to materialise, traders said.
Liffe's benchmark March eased $10 to $759 a tonne after turning over 5,645 lots in a $766-755 band.
The losses put a halt to four straight sessions of gains that peaked at a four-week high of $770 in late Wednesday trade.
May ended $10 lower at $785 on 5,375 lots, while front-month January closed at $734.
Overall 15,286 lots changed hands. Dealers said light trade and speculator buying set the tone earlier, but big investor orders had been missing.
"There is no fund buying at all in London," a trader said.
By 1729 GMT New York's benchmark arabica was down two cents at 103.10 cents a lb.
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