US cocoa settled slightly higher on Tuesday in reaction to the stronger pound and under pressure from Ivory Coast arrivals, traders said. "I think the market is trying to consolidate after the recent losses. I really don't look for it to go too far on the upside," one trader said.
Pound sterling rebounded from Monday's losses against the dollar, which can encourage arbitrage trading in New York. "There's probably a bit of industry buying here, mainly the March contract," another dealer said. In open-outcry trade, ICE December contract rose $11 to settle at $1,852 per tonne, trading from $1,846 to $1,862.
March was up $12, settling at $1,856, while the rest closed $10 to $15 higher. On the electronic platform, December climbed $17 to $1,858 at 12:31 pm EDT (1631 GMT), with trades ranging from $1,837 to $1,864. The rest ranged from $11 to $18 stronger. Support for the market was seen at $1,800 and then at a lower level of $1,750.
Ivory Coast's state prosecutor said on Tuesday he had started an investigation into allegations of corruption in the cocoa industry in the world's top grower. The allegations led to protest by farmers' representatives in the West African country, which have threatened to disrupt cocoa exports.
Abundant rains with long spells of hot sunshine last week in Ivory Coast's main cocoa growing regions are paving the way to a bigger October-March main crop, farmers said. Scattered showers and thundershowers are predicted for the West African cocoa-producing region, DTN Meteorlogix said.
Meanwhile, cocoa farm gate prices in Ivory Coast's main growing regions were steady or slightly up from October 15 to 21, data from the Coffee and Cocoa Bourse showed on Tuesday, and farmers said good quality beans were available.
In London, Life December contract was up 1 pound to settle at 938 pounds per tonne, in a band from 934 to 945 pounds. ICE estimated open-outcry volume around noon at 181 lots, compared with the 845 lots that traded in open-outcry on Monday when 8,017 contracts traded on the ICE screen.