London cocoa extended Friday's gains to touch a seven-week peak on Monday as funds and speculators bought on technical signals, dealers said.
Liffe's second-month March contract rose eight pounds to 874 pounds a tonne by 1242 GMT after moving over 3,000 lots. Front-month December gained 10 pounds to 852 and traded a similar quantity.
Overall volume was 6,659 lots.
"It's purely a technical and short-covering exercise," a dealer said. "There's too much cocoa around so it will probably be short-lived."
He said trade and origin were selling into the rally.
Cocoa has gained 10 percent over the past week as sterling's decline helps the market recover from a seven-week low.
The British pound hit a one-month low against the euro and held near a two-year low against the dollar on Monday.
Fundamentally, there are few cocoa supply worries though as West African production is expected to rise in the 2005/06 season from the previous year. Cocoa arrivals at ports in Ivory Coast were estimated at around 300,000 tonnes by November 20, exporters told Reuters on Monday.
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