US cocoa futures advanced to a seven-week high on Wednesday, fuelled by follow-through speculative buying amid bullish technical signals on the price charts and broad gains in the commodity sector, dealers said.
The New York Board of Trade's benchmark cocoa contract for September delivery rose $15 to settle at $1,578 a tonne, the contract's loftiest settlement since May 12, after trading from $1,554 to $1,579. "On the chart, we were looking for the market to break $1,555, which we did yesterday.
And $1,478 was the next level above us, and we did that today. That's what the market was going for," said a cocoa trader at a commodity brokerage. "The upside momentum is still there, and it is all technically driven," he said. Longer-dated cocoa futures climbed $12 to $15, while spot month July, which had just 282 lots of open interest left on Tuesday, jumped $40 to end at $1,608. Trading volume hit an estimated 14,202 lots, well above the 8,469 contracts officially tallied the previous session.
"Today the specs bought about 4,000 lots," a cocoa trader said from the NYBOT cocoa ring. "I think it was CRB-type buying," he said, referring to the Reuters/Jefferies CRB Index of 19 commodity futures.
At 1:31 pm EDT (1731 GMT), the CRB was up 0.14 percent at 337.54. In London, the Life's September cocoa contract concluded up 9 pounds at 933 pounds a tonne, after tipping 937 pounds, its strongest since April 4.
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