"The specs came in and did a little bit of short-covering and did a little bit of buying," said an exchange floor trader. "I was surprised when we got over resistance of $1,596. The market is definitely looking positive.
Do I think we will go up much further? No " Among other contracts, the May delivery climbed $40 to settle at $1,608 a tonne and back month rose $40 to $42. Cocoa futures opened stronger on the heels of firmer prices in London coupled with a slightly weaker dollar against sterling, which attracted some arbitrage-related buying here.
In London, Life's front-month March delivery gained 17 pounds to end at a six-week high 873 pounds a tonne.
Traders said technical factors dominated today's activity despite a rise in Ivory Coast's declared cocoa exports in the first four months of the 2004/05 season against last year.
Ivory Coast, the world's biggest cocoa producer, had 590,000 tonnes of declared cocoa exports from October 2004 through January 2005, compared with about 540,000 in the same period of the 2003/04 season, a source at the Coffee and Cocoa Bourse told Reuters in Abidjan.
"The numbers from Ivory Coast are very good numbers and they are very much in line with last year's numbers. So I cannot think of any specific supply concerns," said a trader in New York "I think the specs are basically reacting to the market's action in and of itself it's totally technical."
Leading exporters in Ivory Coast said they were shipping stocks as swiftly as possible because they feared renewed violence in the West African country, still teetering on the edge of civil war after a rebel uprising in 2002.
"I think there is nervousness about the situation in Ivory Coast and what will happen with the elections coming up," said Judy Ganes of J Ganes Consulting, a New York-based commodities advisory firm.
Elections are due to be held in Ivory Coast in October but political wrangling has cast doubt on the timetable. Violent unrest in Ivory Coast last November disrupted cocoa deliveries and drove March cocoa futures up to a peak of $1,808 a tonne, the highest level seen since May 2003.
On Tuesday, the United Nations Security Council voted to tighten a UN arms embargo on Ivory Coast in hopes of helping head off any new outbreak of civil war. Traders said estimated final cocoa trading volume on NYBOT reached 15,144 contracts, up from the official 10,828 lots the previous session.
Open interest NYBOT cocoa futures eased 30 contracts to 115,044 lots as of February 1. Technical traders pegged support for March cocoa at $1,530 a tonne, and then $1,500, with resistance between a gap of $1,628 and $1,650.