US cocoa futures settled firm on Friday in a technical rebound, with underlying support from sterling, which strengthened relative to the dollar during the session, dealers said. "It goes back to ... when we held that 50 percent retracement level. So, the technicals are supportive right now," one trader said, referring to May 1, when the second month fell to $1,757.
"The fundamentals are bearish and that's why the market's just trading in a range." A firm sterling can attract arbitrage buying here. The New York Board of Trade benchmark July contract climbed $13 to settle at $1,935, with trades spanning $1,901 to $1,943. September futures ended up $14 at $1,955, while the rest finished $14 or $15 higher, with the exception of May, which closed $8 higher.
"We're pretty overpriced up at this level. The fact that we held that $1,750 level a couple weeks ago, it just held the trend upward," the trader said. The July contract trading on the IntercontinentalExchange NYBOT electronic platform was up $9 at $1,931 at 12:53 pm EDT (1653 GMT). The rest ranged from $16 higher to $11 lower. Electronic trading ends at 3:15 pm.
Cocoa futures in London ended mixed, near a peak dating back to September 2003 for the second month, on continued concern over West African and Indonesian crops, dealers said. The Liffe benchmark July cocoa contract settled 1 pound higher at 1,076 pounds per tonne, moving from 1,060 pounds to 1,082 pounds. NYBOT estimated open-outcry volume around noon at 1,402 lots, compared with a total 10,848 lots on Thursday, when 9,385 of these traded electronically.
In Ivory Coast, the world's top producer, cocoa arrivals at ports from October 1 to May 6 reached 999,306 tonnes, compared with 1,066,196 tonnes received in the same period last season, exporters said on Friday. Also overseas, Europe's physical cocoa market saw little bean purchasing by industry this week because of London's dramatic price rise, but butter business was more active, traders said on Friday.
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