The possibility of unrest in Ivory Coast this weekend provided support, they added. President Laurent Gbagbo's constitutional term ends on Sunday but elections originally planned for the same day have been postponed.
"The mounting tension in Ivory Coast is at the back of people's minds," an analyst said.
Liffe's most-active December contract closed 1.1 percent lower at 834 pounds a tonne, near the floor of an 824-841 range. The contract contributed 3,996 lots to a total of 7,652.
London and New York rallied to their highest in more than a week on speculative short covering on Monday.
Trader estimates for the funds' position in London cocoa ranged from slightly short to slightly long.
Ivory Coast's government agreed a new set of cocoa taxes and levies for the 2005/06 season late on Monday.
COFFEE FIRMS: London coffee prices firmed on Tuesday on a lack of hedging pressure from producing countries just starting the 2005/06 marketing season, dealers said.
Switches on the two front months and trade Against Actuals helped lift total volume to 18,181 lots.
Liffe's second-month January finished 1.1 percent up at $995 a tonne on turnover of 6,731 lots while spot November rose 1.2 percent to $974 after shifting 8,285 lots.
Both positions are up over 12 percent so far this month but down by about 26 percent since 5-1/2-year peaks in June after funds cut back on their coffee holdings.
Robusta has picked up this month amid concern that weather-induced delays and damage to crops in Latin America and Asia, as well as US stocks, will curb the flow of coffee. Production is already expected to be lower on a downturn in Brazil's two-year harvest cycle.
SUGAR ENDS FLAT: London white sugar futures ended steady to slightly higher but stuck in a range on Tuesday, and traders saw a lack of fundamental news to drive the market in either direction.
Most buyers remained sidelined given recent lofty prices, they said.
Front month December settled up 30 cents at $298.2 per tonne in volume of 2,576 lots after trading from $295.3 to $299.3.
March concluded up $1.3 at $307 per tonne in volume of 2,622 lots, having moved from $303.5 to $307.4.