NYBOT cocoa futures ended up modestly on Friday after the dollar fell in the face of a record trade deficit in June, analysts said.
"It looked like the market wanted to break down at one point on a wave of spec selling, but the US dollar dropped sharply following the trade deficit figures and that set the market back up to the highs and kept us in the previous day's range," one trader said.
Benchmark September cocoa settled up $11 at $1,627 a tonne after trading $1,604 to $1,633. December gained $8 to $1,653 after trading from $1,634 to $1,660 and the rest rose $5 to $9. The US currency was battered by the deficit swelling to a record $55.8 billion.
US economists had looked for a gap of $47 billion. The greenback weakened further on the University of Michigan's index showing flagging US consumer sentiment.
Nevertheless, analysts said speculators played both sides of the market as they craved fundamental news to offer them more direction.
Data from the Ivory Coast, the world's biggest cocoa producer, showed cocoa arrivals at its ports had risen by 3,110 tonnes to 1,339,131 tonnes between the start of the 2003/04 (Oct-Sept) campaign and July 18 from the same period in the previous season.
There had been concerns that a July dry spell in Ivory Coast's cocoa belt would hamper its harvest, although those worries have dissipated following recent rainfall to the region. "Maybe the moisture is a little bit below normal, but the long dry spell was not enough to provoke any concern about drought," an analyst said. For the next two days in cocoa-rich West Africa, Meteorlogix forecast showers and thunderstorms, occasionally heavy in northern areas.
Elsewhere, the weather service predicted dry weather with mild temperatures in Brazil and scattered showers and thunderstorms in Indonesia, where a recent dry spell in the main cocoa growing area of Slaws Island has stoked concern about supply.
Final estimated cocoa futures volume reached 11,548 lots, compared with Thursday's 16,286 lots, traders said.
Open interest in the cocoa market rose 745 lots to 111,593 lots as of August 12.