CSCE cocoa hits three-week high on fund short-covering

CSCE cocoa futures in New York eked out a slightly firmer close on Thursday as fund short-covering and speculative buying pushed prices to a 3-week peak before scale-up trade selling trimmed the gains, traders said.
"Specs were good buyers and the funds are heavily short, so they ran the market up as they covered their shorts positions, but the trade sold into the advance," said one floor source.
Benchmark July cocoa rose $8 to settle at $1,413 a tonne, after trading from $1,395 to $1,420 a tonne.
May cocoa ended up $7 at $1,407 a tonne, while the rest of the board traded from $5 to $9 firmer. Looking ahead, traders eyed $1,445 a tonne, basis July cocoa, as the next target-level for prices to breach.
"There is a lot of stops above $1,445 a tonne, so if we have another day of spec buying and the funds continue to cover their shorts, we may have begin to rally," said one dealer.
In other news, cocoa arrivals at ports in Ivory Coast reached 1,117,348 tonnes between the start of the 2003/04 (October-September) campaign and April 18, official data from the Coffee and Cocoa Bourse (BCC) showed on Thursday.
That compared with 1,122,038 tonnes delivered to ports in the world's top cocoa grower during the same period a year.
While 2003/04 arrivals were ahead of the previous season at the end of the main crop, exporters said the smaller mid-crop, which kicked off at the start of April had not produced huge amounts of beans so far.
Analysts said some larger buyers were not buying mid-crop beans because they had lost money during the main crop, leaving the door open for smaller buyers to bring the beans to port at a slower pace than last year.
The figures still point to a strong 2003/04 main crop despite exporters' concerns at the beginning of the season. Final estimated futures volume on Thursday eased to 4,731 lots, versus 4,917 lots on Wednesday.
Open interest in the cocoa market eased 238 lots to 104,853 lots as of April 28. Technical analysts placed support for July cocoa at $1,350 and then $1,325 a tonne, while resistance was seen at $1,445 a tonne.
CSCE is a subsidiary of the New York Board of Trade.