London coffee extends rally

London coffee futures gained about two percent on Tuesday on the back of roaster appetite for front-month prices that are still close to the lowest level in two years, traders said. Liffe's January contract closed at the upper end of its $572-586 range at $583 a tonne, up $13.
The contract accounted for 5,810 lots out of a total of 9,407 after some trade against actuals helped turnover.
"Yesterday's action was key, there was lots of volume and lots of selling but the market weathered it quite well," said a floor source.
Another heavy manoeuvre by a large fund - assumed by traders and analysts to be Catequil Asset Management - bolstered turnover late on Monday. The US fund is also believed to be behind Friday's seven percent decline.
The fund was not immediately available for comment.
Meanwhile, market estimates on where funds now stand in London varied between 22,000 and 30,000 lots. Calyon analyst Jonathan Parkman puts the figure nearer 16,500 lots.cocoa mixed
London cocoa futures closed either side of unchanged on Tuesday as even two-way trade and structural dealings contributed to reasonable volume, floor sources said.
Liffe's most-active March cocoa settled at the bottom of the day's range, one pound down at 851 pounds a tonne after earlier reaching 857. Volume was 2,509 lots out of the 9,364 total.
Further ahead, September gained one pound to end at 902 pounds a tonne. The contract maintained an 899-906 range on volume of 2,181.
"The market has been extremely liquid with good scale-down buying on forwards and good selling on March," said one trader.
Still, he said plans to resume a farmers strike in Ivory Coast was keeping the market cautious.
Cocoa exporters in Ivory Coast began closing their doors on Tuesday after union leaders said they should stop working because industrial action was set to resume in full on Wednesday.
Liffe December settled at 830 pounds a tonne, two pounds lower following volume of 2,077 lots and moves between 829 and 836 pounds.
Traders said prices are unlikely to break out of the range seen in recent weeks till the Ivorian price dispute is resolved.
Although most expect the farmers to cave in eventually quality remains an issue because wet weather has increased the likelihood of damage to beans hoarded because of the strike.
"Overall it has been a slow start (to the season) and people have been disappointed by what they've seen so far," said the first trader.