LIFFE cocoa futures rose sharply on Friday supported by speculative and trade buying as recent shorts began buying and pushed the market through resistance levels, dealers said.
The outlook was for a sideways market following the volatile activity of the past few days, with prices hovering between near two-year continuation lows and three-week highs.
Dealers said persistent doubts about the Ivorian crop this season underpinned bullish views of the market but most of the recent strength was based on technical levels as players awaited further information on arrivals at the world's top producer.
Bids focused on the March contract, with spread activity contributing substantially to the turnover and origin selling capping the upside.
"There was quite a bit of speculative buying. They had recently been selling massively so they bought back part of that," a dealer said.
"I actually thought we were going further down to 800 earlier in the week but the market has come back on that," the dealer added.
Benchmark March closed 25 pounds higher, or 2.72 percent, at 943 pounds per tonne on 6,541 lots out of a total turnover of 11,914 lots.
It moved between 962 and 911.
Technical analysts said the market should consolidate after its recent volatility, with support coming at 892 and resistance at 983 after breaking through 954.
The market awaited information about European grindings after a strong German grind figure released on Wednesday, although dealers said recent strength was mainly based on fund orders and technical levels.
The latest arrival figures indicated a late or smaller main crop than the previous one, but many dealers are still expecting a healthy total crop figure of around 1.2 million tonnes for Ivory Coast.
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