US cocoa futures inched up to a new 16-month high on Monday, with trade selling unable to match active speculative and fund buying for the 11th consecutive trading session, traders said.
The New York Board of Trade's cocoa contract for September delivery rose $5 to settle at $1,734 per tonne, near the top of a trading range from $1,715 to $1,737 - the contract's loftiest price since March 2005. Longer-dated cocoa futures ended flat to up $4 despite market expectations of a narrowing global supply deficit and improving crop prospects.
"A lot of what is going on right now doesn't have a fundamental backbone to it," a cocoa trader said. "It is just that the funds and specs keep buying, and we are not even sure why they are buying," he said, speaking from the NYBOT cocoa ring.
"Even though there was good trade selling today, the funds took the market right back up," the trader added. Another trader said speculators and funds had bought about 3,000 lots out of an estimated 12,273 contracts of cocoa futures trading volume. Exporters in top cocoa grower Ivory Coast on Monday said the current mid-crop harvest could yield up to a record 400,000 tonnes.
So far for the entire 2005/06 season, cocoa arrivals at Ivory Coast's ports reached an estimated 1.286 million tonnes between October 1 and July 9, up from 1.252 million tonnes during the same period the previous season.