US cocoa futures firmed on Wednesday on speculative buying spawned by overnight political tension in top grower Ivory Coast, although prices failed to move above a lingering trading range, traders said.
"The market is just a little bit nervous after reading about the confrontation earlier today," a trader said. "The market has been very quiet for some time, so it can move on just one piece of news bullish or bearish," he said.
The most-active December cocoa contract rose $13 to settle at $1,4703 a tonne on the New York Board of Trade, after trading from $1,465 to $1,478. March 2005 likewise climbed $13 to $1,484 and distant futures ended up $9 to $12.
The December delivery has been moving in a $1,390-$1,480 trading range since September 24, when the contract traded as high as $1,515 a tonne.
NYBOT floor sources expected cocoa futures to open at least $20 higher on overnight news that French troops in Ivory Coast clashed with gunmen who attacked them in the rebel-held north.
But speculative interest waned with jitters about tension in the West African country, where French polices a cease-fire line between government and rebel forces and UN forces. "Any move here at the moment will be short lived, because the crop is about to come out, and there is only so much the market can do," a trader said.
Meanwhile, market players await the outcome of talks between unions representing Ivory Coast cocoa farmers and the government over farmgate prices and a proposed co-operative fund.
The farmers, who agreed to suspend a recent five-day strike to allow the discussions this week, will try to halt cocoa deliveries from Monday if no agreement is reached. NYBOT's estimated cocoa futures volume just before the market closed reached 6,254 lots, compared with 4,693 lots the previous session.
Open interest in NYBOT cocoa rose 788 lots to 122,582 lots as of October 26. Technically, traders kept support for the December delivery at $1,390 with resistance at $1,480.
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