US cocoa futures posted modest gains on speculative buying on Tuesday, but prices failed to move out of a persistent trading range as farmgate price talks continue in top grower Ivory Coast, traders said.
"Producers are willing to take this price on any rally, and processors will buy, but only on their terms," a trader said. "We don't see anything on the horizon, unfortunately, to break this sideways momentum."
The most-active December cocoa contract rose $8 to settle at $1,457 a tonne on the New York Board of Trade, after trading in a narrow range from $1,446 to $1,461. March 2005 likewise advanced $8 at $1,471 and distant futures ended up $5 to $7.
Cocoa beans flooded Ivory Coast ports after farmers in the world's largest cocoa producing country suspended a five-day strike about farmgate prices over the weekend, Reuters reported in Abidjan.
Unions representing the farmers suspended their strike to allow talks with the government on a deal to fund co-operatives, but threatened to resume their action next week if they were not satisfied by the outcome.
The lingering dispute coupled with a dearth of crop information has curbed activity in the futures markets, with the December contract drifting within a $1,390-$1,480 trading range for more than a week.
"The market is just consolidating," a trader said, adding that prices would have to break above or below the range to attract more interest.
Traders cited some switching between the two front future contracts ahead of the December contract's first notice day on November 15. NYBOT's estimated cocoa futures volume just before the market closed reached 3,852 lots, compared with 3,100 lots the previous session.
Open interest in NYBOT cocoa rose 390 lots to 121,794 lots as of October 25. Technically, traders kept support for the December delivery at $1,390, with resistance at $1,480.
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