Cocoa futures prices finished at their loftiest levels in more than two weeks on Monday, boosted by speculators buying back short positions amid bullish signals on the price charts, market sources said.
The New York Board of Trade's active July cocoa contract rose $21, or 1.4 percent, to settle at $1,488 a tonne, after dealing from $1,467 to $1,495. It was the highest settlement for the contract since April 7, thanks to automatic sales orders triggered when the contract broke through key resistance of about $1,480, traders said.
"When we crossed $1,480 some of that speculative short covering kicked in," a cocoa trader said, speaking from the NYBOT trading arena. "Apart from that it was a pretty light day," he said. Among other cocoa futures, the September delivery advanced $19 to end at $1,509 a tonne and longer-dated positions likewise climbed $19.
Estimated trading volume in cocoa futures reached 7,820 contracts on the NYBOT, slightly above the relatively low 6,591 contracts officially tallied the previous day. Cocoa futures had a wobbly start in the session, but the market found support from rebounding bean values in London, traders said.
The Life's active July cocoa contract gained nearly 2 percent to end at 885 pounds a tonne.
On the supply front, cocoa arrivals at ports in No 1 producer Ivory Coast reached an estimated 969,000 tonnes between October 1 and April 23, down 2.4 percent from the 993,000 tonnes delivered to ports during the same period last year, exporters in Ivory Coast said on Monday.
Still, the West African country exported 747,241 tonnes of beans in March, slightly higher than the 740,482 tonnes in the same month a year ago, provisional port data showed. In No 2 cocoa grower Ghana, mid-crop volumes are picking up, particularly in the western part of the country, helped by favourable weather, buyers said on Monday.
"There has been a good expectation for the mid crop and the upcoming groups overall, but what's starting to overshadow that is the fact that the specs have been building up a massive gross short position," the trader said, adding "that is now being seen as a potential upside risk."
The last Commitment of Trader report issued on Friday by the Commodity Futures Trading Commission showed the gross non-commercial position of cocoa futures was 40,865 lots, and the net short position was 5,152 lots, as of April 18.
"We believe the specs have added another 4,000 to 5,000 lots (to the gross short position) since the tabulation of that report," the trader added.
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