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London cocoa closed higher on Thursday, mainly supported by stronger prices in New York, but market participants were still waiting for fresh technical or fundamental signals to provide momentum, traders said. "The market is still waiting for new developments, it's been extremely range-bound this week," said a trader. "It's essentially well-supported, running at last week's lows. It's running into some very light-scale trade hedging."

Trade Against Actuals boosted volume, which totalled 9,163 lots.

Liffe's front-month March contract gained seven pounds to settle at 866 pounds per tonne in volume of 4,558 lots. It traded between 853 and 868.

Second-month May rose seven pounds to settle at 878 pounds per tonne, on volume of 2,232 lots. It traded between 865 and 881.

New York cocoa futures rose on Thursday on speculative and fund buying on early dollar weakness and some concern about potential disruptions in cocoa supply from top grower Ivory Coast should farmers decide to go on strike next week.

The May contract rose $30 to $1,615 a tonne.

Cocoa purchases in Ghana, the world's second biggest producer, have slowed in recent weeks, but are expected to pick up again from mind-March, the chief executive of regulatory body Cocobod said on Thursday.

Kwame Sarpong told Reuters his organisation had not yet cut its forecast of 700,000 tonnes for the 2004/05 crop, despite reports that dry weather and poor fermentation of beans may have reduced the size of the crop.

LONDON ROBUSTA MARKET WEAKENS: The Liffe robusta coffee market closed more than one percent down on Thursday following a choppy afternoon session spent tracking New York arabica futures, floor sources said.

An $11, or 1.3 percent, decline left Liffe's benchmark May to close at $852 a tonne on turnover of 5,384 lots after trading between $845 and $860. Total London volume reached 9,185 lots.

The contract has spent over a week fluctuating just below a two-month continuation high of $872, the loftiest price since February 12, 2003. The market is now bracing for large speculators to weary of their recent buying spree and start shedding their investments, some dealers say.

Others say funds may have taken a longer-term approach to the market as part of a general trend to shift money out of other asset classes into commodities.

"These commodities are red-hot. There's so much money floating around and they (the funds) don't know what to do with it," a physical trader said.

Copyright Reuters, 2005


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