Benchmark cocoa futures rose about 2 percent on Tuesday as a soft dollar attracted speculators, funds and trade to the market, traders said. The New York Board of Trade's most-active May contract gained $31, or 1.99 percent, to settle at $1,592 a tonne, near the top end of a daily range from $1,562 to $1,598. The front-month may contract climbed $27 to $1,570 a tonne, while back month cocoa futures advanced $31 to $32.
"There was some light speculative activity after the we pushed through yesterday's high and that triggered some stops along the way," said a trader. "The specs and funds are going longer in cocoa.
There was some new buying today," said another trader, pointing out firmer prices in other commodity futures, such as sugar and coffee. "It's probably related to the dollar," he said.
The weaker dollar inspired some arbitrage trading between London and New York, although the dollar was little changed against sterling.
However, the greenback's weakness against the euro in the session gave broader commodities a boost. The Reuters Commodities Research Bureau Index was up 0.42 percent shortly after the cocoa market closed.
In London, Life's most-active May contract rose 12 pounds to settle at 873 a tonne. A trader said estimated cocoa futures trading volume reached 7,897 lots, compared with the official 4,966 contracts the previous session.
As of February 14, open interest fell 127 lots to 109,743 contracts. Technical traders pegged support in May cocoa at $1,562 and then at $1,540, with resistance at $1,608 and then $1,628.
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