New York cocoa futures were up $15 to $20 Wednesday, taking a cue from firmer bean prices in London and a slightly weaker dollar against sterling, exchange floor sources said. "We are calling it up 20. London is up a little bit and sterling is stronger against the dollar," said one source, pointing out that a weaker dollar generally promotes arbitrage-related buying here.

In London, LIFFE front-month March cocoa was up 4 pounds at 859 pounds a tonne amid expectations that tightening supplies will bolster prices later this year.

On the weather front, rainfall in key cocoa growing areas of Ivory Coast after a damaging dry spell has revived hopes the smaller mid-crop (April-Sept) in the world's top cocoa grower will be healthy, farmers told Reuters on Wednesday.

During the last 11 days of January, two major cocoa growing zones in Ivory Coast received well above-average rainfall, showed recent data from weather service Sodexam.

Despite the wet weather in Ivory Coast, trade and speculative buying pushed cocoa futures in New York up more than two percent on Tuesday.

New York Board of Trade most-active March cocoa settled up $36 at $1,561 a tonne after dealing from $1,530 to $1,567. May likewise rose $36 to $1,568 and back months climbed $33 to $36.

Technically, traders put support in March cocoa at $1,530 and then $1,500 with resistance at $1,596 to $1,600.

Copyright Reuters, 2005