US cocoa finished mostly firm on Tuesday, near the day's highs after a rangebound session marked with fund buying and arbitrage selling, traders said. "The funds did a little bit of buying here today, some small specs and probably a little bit of trade and arbitrage on the sell side of things," one trader said.
The ICE open-outcry benchmark December contract edged up $4 to finish at $1,856 per tonne, in a trading band from $1,842 to $1,859. One contracts aside, the rest ranged from flat to $8 firmer. The electronically traded December contract was quoted $4 stronger at $1,856 at 12:42 pm EDT (1642 GMT), with trades spanning from $1,835 to $1,864.
The rest were $1 to $3 higher. Cocoa futures were firm ahead of the pit open but quickly turned lower, where they stayed for much of the session. Sterling turned firm relative to the dollar, which can attract arbitrage buying in New York. But US cocoa futures found support late while London cocoa stayed lower.
This made New York cocoa more expensive and caused light arbitrage selling, capping gains, dealers said. In London, Life's December contract closed down 6 pounds at 961 pounds per tonne, moving from 957 to 972.
Meanwhile in the top cocoa producer, farmgate prices in Ivory Coast's cocoa regions rose September 3-9, data from the Coffee and Cocoa Bourse showed on Tuesday, despite concerns over the quality of some beans on sale. On the weather front, occasional showers and thundershowers were seen moving westward across West Africa through on Wednesday, bringing 0.1 to 1 inch of rain, DTN Meteorlogix said.
ICE Futures US ceased pit trade for one minute 8:46 am EDT (1246 GMT), 9:03 am, 9:59 am and 10:29 am, to mark the sixth anniversary of the September 11 hijacked plane attacks on the World Trade Centre. Electronic dealers were asked to refrain from trade during the moments of silence. ICE estimated coffee open-outcry volume around noon at 568 lots, compared to the 478 lots that traded in the pit on Monday when 6,394 contracts traded on the ICE screen.