US cocoa futures surged ahead to a 4-1/4 year high as speculative buying and a lack of selling interest triggered buy-stops, dealers said. "We just saw some fund and spec buying here today," one trader said. "It's mainly technicals right now, no real news behind this rally today."
The New York Board of Trade benchmark September contract jumped $66 to settle at $2,017. It traded between $1,970 and $2,025, its highest position since mid-March 2003 on a second month basis. The contract hit a 4-year high earlier in the trading session.
The NYBOT front-month July contract surged $70 to close at $2,022. The rest ranged from $60 to $64 higher. The September contract trading on the Intercontinental Exchange NYBOT electronic platform was up $53 at $2,004, at 12:33 pm EDT (1633 GMT), ranging from $1,951 to $2,004. The rest spanned from $39 to $70 higher. Electronic trading ends at 3:15 pm.
In London, the Liffe September contract also reached a four-year high on speculative trading. It rose 33 pounds to settle at 1,099 pounds, with trade ranging from 1,066 to 1,104. The rest settled up from 29 to 36 pounds.
NYBOT estimated open-outcry volume around noon at 1,467 lots, compared to the 1,661 contracts that traded in open-outcry on Monday, when 6,606 contracts traded on the ICE electronic platform. In West Africa, Ghana's farmers probably will harvest 50,000 to 65,000 tonnes of cocoa in the July-September mid crop, down from about 90,000 tonnes last year, buyers in the world's No 2 cocoa producer said on Tuesday.
Meanwhile, strong competition for beans kept farmgate prices well above the recommended 400 CFA per ($0.82) kg guideline price in Ivory Coast's main cocoa zones from June 18-24, Coffee and Cocoa Bourse (BCC) data showed on Tuesday.
A purchases manager for a European exporter based in Abidjan said competition among buyers had been fierce as exporters put up their rates to secure beans, fearing supplies in the bush would tail off sharply in the course of the next month. Nigerian cocoa prices rose 6 percent to 170,000 naira ($1,333) per tonne at the farm gate in the last month on poor supply and quality concerns, traders and farmers said on Tuesday.
Nigeria's April-September light crop, which usually turns out around 50,000-60,000 tonnes, was hampered by adverse weather conditions. There was an unusually long harmattan season and a lack of rain in the growing region in the months before the harvest.