New York cocoa futures surged to a 22-month high Friday on fund buying amid concerns about instability in top producer Ivory Coast, although profit-taking trimmed those gains just before the market had closed. "The fund buying started to dry up and you started to have some profit-taking instead," said a floor trader at the New York Board of Trade. "There was good activity here between spec, fund and arbitrage activity."
The New York Board of Trade's benchmark May cocoa contract settled $51 or up 2.9 percent at $1,804 a tonne, after hitting a contract high $1,842, the loftiest for a second-month contract since May 8, 2003.
The July delivery likewise gained $51 to end at $1,818, after it marked a contract peak $1,855 earlier in the session. Deferred deliveries finished up $51 to $52.
Traders attributed the sharp gains at the market opening to heavy fund buying seen in the cocoa futures market in London, with fears about renewed violence in Ivory Coast and limited producer selling fuelling the bullish sentiment.
"I think the market just got nervous, and the buying we saw in London just triggered some buy stops, and the market just went up," said a trader. "Once we hit that high, then the market just turned around," he said.
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