US cocoa futures settled firm on Wednesday, after a choppy session that saw speculators on both sides of the market, traders said.
"We were seeing some weakness due to the weak stock markets, so all the commodities were down, however, cocoa's finding some support at that $2,100 level and we're just going through a consolidation here between $2,100 and $2,200," one cocoa trader said about the benchmark March contract.
In open-outcry, the key ICE March cocoa futures contract finished up $7 at $2,138 per tonne. Except for one deferred contract, the rest closed up from $5 to $28.
The electronically traded ICE March contract was up $3 at $2,134 by 12:58 pm EST (1758 GMT), in a trading band from $2,112 to $2,158. Two back months aside, the rest closed from $3 to $11 higher.
"(There is) just not much news here driving the market one way or another. It's just specs, all technicals trading right here," a trader said, noting the market was still in an uptrend. A close below $2,100, basis March, could cause long liquidation, the trader said.
"You're going to see less origin selling once we get into the end of January just because the arrivals from Ivory Coast start to slow down," one dealer said, about the biggest producer in the world. In the London market, cocoa futures trading on Liffe also finished higher with the benchmark March contract closing 15 pounds higher at 1,132 pounds per tonne, in dealings from 1,117 to 1,138 pounds.
Around noon, ICE estimated 1,004 lots traded in the pit. This compares to the 392 contracts traded on the floor Tuesday when 15,279 lots were dealt on the screen. Open interest in ICE cocoa futures fell 889 lots at 190,696 contracts as of January 22.
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