US cocoa futures closed on positive ground on Tuesday, with spread trading and industry buying helping prices rebound from new contract lows recorded earlier in the session, traders said.
The New York Board of Trade's active cocoa contract for December delivery settled up $12 at $1,334 a tonne, after trading from $1,319 to $1,336.
The bottom trade, which surpassed the previous contract low of $1,320 set on Monday, was the weakest price for a front-month delivery since August 17.
March advanced $8 to end at $1,364, after setting a low of $1,351. More distant cocoa futures climbed $7 to $8.
A large chunk of the estimated futures turnover of 25,872 contracts was comprised of transactions between the December and March contracts, traders said.
"That was pretty much all of the activity today," said a trader.
Another trader cited good buying in the market as the spread between the December/March contracts narrowed from 35 to 25 points.
"There was a lot of buying coming in with that," he said.
Trading turnover has accelerated this week, due in large part to non-commercial participants rolling their positions out of the December contract ahead of its first notice day for delivery next Tuesday.
Cocoa futures were depressed over the past three days in the face of a stronger dollar, coupled with origin selling in London and the prospect of ample supply from a new West African crop.
The pound sterling dropped to its lowest level in more than three months against the dollar on Tuesday due to broad-based dollar strength.
A weaker pound generally incites arbitrage-related selling here.
In London, the Liffe's benchmark December cocoa delivery finished at 803 pounds a tonne, up 0.6 percent.
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