London cocoa rises

London cocoa prices closed higher on Thursday hemmed between speculative interest and trade scale-up selling as players tried to make sense of the latest export numbers out of Ivory Coast, dealers said.
The outlook was for a steady market, with dealers viewing possible bounces and a chain of buying stops potentially taking the market nearer the 900 pounds-per-tonne area.
"The market is technically looking good and origin hasn't done much today, so we had room to move higher," a dealer said.
"I think there should be further room to the upside and we should move higher in the short term. We managed to get up to 840 today and I think once we break 850 we will easily move up to 870."
But players remained unconvinced about the durability of the gains and said recent 29-month continuation lows were not out of the picture yet.
Benchmark July closed eight pounds up at 840 pounds per tonne on 2,983 lots out of a total turnover of 10,231 lots.
May gained seven pounds to close at 831 on just 578 lots.
The May/July spread narrowed to around a four-pound discount.
Spreads were active and the whole market structure tightened as the fund large short position offered support to prices.
But fundamentals offered no support, with top growers harvesting large crops and arrival data at Ivorian ports confirming a large 2003/04 main crop of around one million tonnes.
At the same time, players were scratching their heads over export data for beans and products released on Thursday which would put the amount of actual cocoa exported at around 800,000 tonnes by the end of March.
This would mean some 200,000 tonnes left in stocks in the world top producer but dealers said this figure was too high for the end of the main crop.
"We have arrivals for the end of March, we have exports for the end of March and we know what the carryover was. So the inference is there were about a quarter of a million tonnes of stocks in Ivory Coast, which for the end of March would sound absolutely astonishing," a dealer said.
Players also eyed the London May option expiry on Friday, which should help to keep prices above 800.