US cocoa futures closed up 1.7 percent on Wednesday, sustaining high levels last seen nearly four years ago and recovering from the previous day's losses on speculative buying, traders said.
"The trade and the industry are both waiting for a corrective move down but it hasn't happened yet. It seems the specs still have control of the direction," one trader said.
The New York Board of Trade's benchmark May contract settled up $32 at $1,925, in dealings from $1,894 to $1,937. July climbed $33 to $1,952, with trades spanning from $1,921 and $1,964. The rest closed from $32 to $34 higher. The May contract was up $38 at $1,931, at 12:56 pm EDT (1656 GMT), on the IntercontinenalExchange NYBOT electronic platform. July rose $35 at $1,954.
Electronic trading ends at 3:15 pm. Prices initially soared to a fresh high dating back to May 2003 on March 20, underpinned by strong demand and concerns about severely dry conditions in parts of the West African cocoa belt. "The rally's continuing despite improved weather conditions and crop prospects in West Africa.
Origins are for the most part sold out of their main crops and sidelined for the moment," a broker said. The bullish market also appeared to ignore the Ivory Coast government's recent announcement that it has agreed to name rebel leader Gallium Sore as prime minister under a plan to reunite the country.
The move has the potential to lead to increase cocoa production in the world's top cocoa growing country, something typically seen as bearish, the broker said. "People can concentrate on what they do best over there and take good care of their cocoa tree," the broker said. In overseas trade, London cocoa futures set a fresh 3-1/2-year high.
The Liffe July contract finished 16 pounds higher at 1,062 pounds per tonnes, in a trading band from 1,043 to 1,067. NYBOT estimated volume around noon at 4,086 lots, compared to the 8,363 tallied on Tuesday when 5,163 of these traded electronically.