US cocoa futures settled mildly higher Wednesday after light fund buying brought support to the market, which had moved lower during overnight trade after soaring to 28-year high Tuesday, traders said.
"Normally a lot of us would trade the arbitrage. I think margins are so tight most physical trading houses are having difficulty keeping their short hedges on. Most people have got out of arbitrage positions," one trader said.
The key May contract settled up $26 at $2,778 per tonne. July settled up the same at $2,791. By 1:26 pm EST (1826 GMT), the May contract was up $9 at $2,761, with trades spanning $2,710 to $2,788.