London cocoa futures ended level on Wednesday after a session featuring mainly spread and options activity, dealers said. "In terms of outright activity people are just sitting on the fence as they wait to see what the next trend will be," one trader said. With funds estimated to be nearly square in the US and short in London, many in the market feel cocoa is ripe for a rally after losing about a fifth of its value since the peaks of mid-November.
Liffe's benchmark March position finished unchanged at 826 pounds a tonne. Volume on the contract was 6,933 lots out of a total of 12,183.
It changed hands between 813 and 833, within the 812-834 range seen for more than a week. That compares with a front-month price of 1,021 pounds a tonne on November 10 when instability in Ivory Coast sparked speculation about supply shortages.
"Some think the market is finding support, others see it going down to 600. It's a big crop but with tension still there (in Ivory Coast) funds are unlikely to make a concerted move to the short side," a second dealer said.
May and December both attracted volume of over 1,100 lots. May closed flat at 838 pounds while December's settlement price was 862, one pound lower.
United Nations peacekeepers in Ivory Coast will use force to repel any attempt to break through a buffer zone dividing the country, and French troops are ready to help them, a French army commander said on Tuesday.
Smugglers offering higher prices to farmers are still diverting some of top producer Ivory Coast's cocoa beans into neighbouring Ghana, co-operatives and buyers said on Wednesday.
COFFEE BACKS DOWN FROM TWO-WEEK HIGH: London's robusta market retreated from the previous session's two week peak on Wednesday as industry failed to totally absorb origin selling, floor sources said.
Liffe benchmark March ended five dollars softer at $735 a tonne after moving between $735 and $746 on turnover of 5,507 lots.
May pulled in volume of 4,186 lots and closed down six dollars at $760 a tonne. September turned over 1,448 lots before ending down five dollars at $801.
New York arabica futures also backed down from a high. The NYBOT's benchmark March coffee contract slid to as low as 103.3 cents a lb after extending Tuesday's three-week peak with a rise to 105.25 earlier in the day.
"There was some profit taking and light origin sales around 105," the same dealer said.
Prices for the top two Kenyan coffee grades have dropped on meagre demand by buyers, traders said on Wednesday.
The volumes of coffee at the auction this week decreased to 37,320 50-kg bags from 38,190 at the last auction, the Nairobi Coffee Exchange said in a weekly report.
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