US cocoa futures contracts closed near the session's highs on Monday, after late-day fund buying boosted prices, traders said. "There's a small amount of short-covering still. The big move is really macro fund investment," one trader said.
Interest was spurred in part by a report by independent analyst Hans Killeen released late last week, which forecasted a higher-than-expected global cocoa deficit, the trader said. The New York Board of Trade benchmark March cocoa futures contract delivery settled up $14 per tonne at $1,652, trading in a range from $1,1628 to $1,655.
The upward move follows on Friday's firm trade in the March contract when fund and arbitrage buying pushed it out of its range, shooting to a 16-week high. May rise $13 to $1,671, trading between $1,648 and $1,672. The rest climbed $15, with the exception of December, which settled $8 higher on minuscule volume.
Estimated trading volume near the close was 10,503 lots, compared with the previous official tally at 20,070 lots. Speculators continued to increase their long positions and traders said they expect this trend to continue. Cocoa futures in London closed near a fresh four-month high on support from speculative buying, dealers said.
Life's March cocoa settled up 11 pounds per tonne at 896 pounds after trading in a band from 882 to 897 pounds. Cocoa arrivals at ports in Ivory Coast from October 1 to December 10 reached around 412,000 tonnes, compared with 466,206 tonnes delivered in the same period last year, exporters estimated on Monday. Ivory Coast is the world's top cocoa producer. Cocoa arrivals at Ivory Coast's port of San Pedro reached 160,952 tonnes from October 1 to December 3, 2006, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters on Monday.
That compared with 194,902 tonnes delivered to the port during the same period of the 2005/06 season, the data showed. Dry weather persisted in key cocoa-producing areas of Ivory Coast in December, raising concerns that lack of moisture could dent output during the October-March main crop season, farmers said on Monday.
Candy maker Hershey Co said on Monday its directors approved an additional $250 million stock repurchase authorisation. The company said it expects to complete $500 million stock buyback by the end of 2006.
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