Cocoa bounces in London

Cocoa futures recovered in a technically driven bounce on Thursday, while arabica coffee edged up as the market looked to build on Wednesday's sharp gains and sugar rose on trade and investor buying. In cocoa, investors defended net long positions to square positions before the end of the month.
"Yesterday the market didn't benefit fully from the weaker sterling after the (UK) budget," one dealer said. Another said: "It's short covering by operators buying back positions they sold last week." London July cocoa futures settled up 35 pounds or 2 percent to 1,775 pounds per tonne in modest volume of 4,912 lots, while ICE July cocoa closed up $70 to $2,460 per tonne.
The cocoa market's attention is centred on the demand outlook after recent poor grindings data while prospects for West African mid crops are improving after favourable weather. In the arabica coffee market, dealers said May arabicas, which are now in their delivery period, were boosted by interest in receiving coffee against the contract.
"At least in the short-term while someone stops (receives) New York (May arabicas) it could be the catalyst to keep the market here," one London dealer said. May arabicas stood 0.1 cent higher at $1.1705 per lb at 1649 GMT, moving to parity to July, which was up 0.05 cent at $1.1780 per lb.
The July contract had peaked at $1.19 per lb on Wednesday, boosted by a wave of short covering after several failed attempts to breach key support in the $1.1275 to $1.1285 area. Dealers said there was some concern that a truckers' strike in Colombia could disrupt supplies although adding shipments from Brazil were continuing at a heavy pace.
Colombian coffee exports will stop or slow down dramatically within one week if a truck drivers' strike that started on Wednesday continues, the country's leading coffee exporters' group told Reuters. Dealers said talk there could be a higher than normal risk of frost in Brazil this year may also have provided some support.
In sugar, dealers talked of trade and investor buying with the focus on the looming ICE raw May expiry on April 30. Traders said it was still too early to accurately gauge the delivery tonnage, with some 80,000 lots of open interest on the board. ICE July raw sugar was up 0.11 cent to 13.66 cents per lb at 1759 GMT, while London August white sugar finished up $2.6 to $409.40 per tonne in slim turnover of 2,268 lots.