US cocoa futures finished marginally higher on Tuesday as bean values stabilised following a sharp speculative sell-off, although trade sources feel further fund pressure may cause the market to slump.
"The funds that had been selling for the last few days took the day off," a trader said. "This lack of liquidation pressure allowed the market to stabilise."
The New York Board of Trade's benchmark cocoa contract for September closed up a mere $1 at $1,484 per tonne, after moving between $1,478 and $1,499. It was an inside day since the range was within Monday's $1,475 to $1,503 band. The deferred contracts rose by $1 or $2. "London isn't leading us at all," said a trader. "So you could see further liquidation as the week goes on - there's more to come."
Liffe's September cocoa contract LCCU6 rose three pounds Tuesday to 863, up 0.35 percent.
September cocoa had fallen sharply recently as funds dumped huge long positions built up during the market's rally to 16-month highs between mid-June and mid-July. Tuesday's steady moves come as the mid crop season draws to an end in top grower Ivory Coast and cocoa arrivals are near complete. NYBOT final estimated volume Tuesday was at 7,701 lots, more than half down from Monday's 15,968 lots.
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