CSCE cocoa futures in New York finished with modest gains on Wednesday, as follow-through speculative selling gave way to short-covering and industry buying off the lows, traders said.
"There was selling at the open on some currency movements and a stronger US dollar, but a floor was found under the market as guys covered their short positions," said one floor dealer, adding that the volume was "non-existent."
Benchmark July cocoa rose $8 to settle at $1,345 a tonne, after moving from a new life-of-contract low at $1,325 to its session peak of $1,350 a tonne.
May cocoa edged $3 better to $1,335 a tonne, while the rest of the board settled up $2 to $9.
"Cocoa fared pretty well today, closing higher after resettling contract lows," said one floor source.
"I think we go higher from here," he added.
Cocoa futures have been declining since December as industry crop estimates for top producers Ivory Coast and Ghana have risen, improving the global supply outlook.
"Everyone is talking about increased production figures in Ivory Coast," said James Corridor at Liberty Trading Group.
In other news, Nestle SA, the world's biggest food group said on Wednesday its first quarter sales rose 3.5 percent to $15.6 billion.
Stocks of cocoa beans in warehouses of storage companies licensed by the exchange stood at 1,702,519 60-kg bags on April 20.
Final estimated futures volume was only 6,560 lots on Wednesday compared with Tuesday's official count of 12,501 lots. In the options pit, 921 calls were traded and 332 puts were traded. Open interest in the cocoa market increased 1,830 lots to 102,927 lots as of Tuesday.
Technical analysts saw support for July cocoa at $1,325 a tonne, then at around $1,300, while resistance was pegged at around $1,400 a tonne.
CSCE is a subsidiary of the New York Board of Trade.
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