Liffe cocoa edges up

London's cocoa market made limited gains on Thursday with benchmark prices touching a fresh four-month contract peak but traders said a concerted drive higher was unlikely till large speculators re-enter the market. Liffe's benchmark May closed up two pounds at 971 pounds a tonne. It peaked at 984, five pounds over the previous four-month high, and bottomed out at 967. The contract attracted volume of 5,881 lots.
"The market is a bit undecided at these levels but both markets have made new highs," a trader said.
Turnover totalled 10,275 lots with July contributing the second-highest volume at 2,131 lots. The contract finished two pounds higher at 989 pounds a tonne.
Investment funds have swooped on commodities markets recently as a weak dollar makes such assets more attractive.
Investor interest in cocoa has focused on New York's dollar-traded market, where the benchmark May contract marked a new contract and 22-month high of $1,850 a tonne on Thursday.
Meanwhile, tension lingers in top cocoa producer Ivory Coast, which has been divided between a rebel-controlled north and the government-run south since a civil war in 2002.
Rebels said on Thursday that South Africa's president, Thabo Mbeki, who has been trying to revive the former French colony's stalled peace process, had invited the main parties to the conflict to urgent talks.
LONDON COFFEE RISE: London's benchmark robusta coffee prices gained ground on Thursday but continued to fluctuate round the $1,000 level as market players awaited funds' next move, dealers said.
Liffe's most-active May position ended $17, or 1.7 percent higher at $1,005 a tonne after a 973-1,010 price band. Volume stood at 5,881 lots from a total of 10,275.
Robusta touched a five-year peak of $1,125 last week after several months of aggressive buying by investment funds, which have boosted commodities markets across the board recently.
"The next move is only going to be what the specs will do. If tomorrow they decide they are liquidating in the metals and grains markets then they will probably do the same in coffee but if they stick with them, they should stick with coffee," a trader said.
Contracts further forward also gained $17, leaving July at $1,032 and November at $1,073. July turned over 2,131 lots and November moved 1,104 lots.
European coffee roasters and trade houses were smarting as the fund activity and five-year highs increased volatility and pushed up margin calls, physical dealers said on Thursday.