Cocoa prices rose on Wednesday after tapping multi-week lows, erasing most of the prior sessionâ€™s steep losses as fund buying returned to the markets.
Reuters disclosed that Arabica coffee also inched higher. It revealed that July New York cocoa settled up $56, or 2.1per cent, at $2,730 per tonne, after falling to a one-month low at $2,629.
The trend-following fund buying provided a boost, traders said, causing prices to give up much of the prior sessionâ€™s losses.
Also, July futures closed down 3.8 per cent on Tuesday, its biggest one-day fall in six weeks. Meanwhile, total open interest dropped just 416 lots to 305,050 lots, ICE data show. Tuesdayâ€™s sharp decline was thought to have signalled an end of this yearâ€™s strong run-up in prices, dealers said, but that may have been premature. Itâ€™s system (funds) that are defending today,â€ one U.S. trader said.
However, it revealed that July London cocoa settled up 25 pounds, or 1.3 percent, at 1,895 pounds per tonne, after dipping to a three-week low at 1,844 pounds.
Ivory Coast has sold 1.1 million tonnes of cocoa export contracts for 2018/19 and aims to sell between 1.3 million and 1.4 million tonnes, two senior Coffee and Cocoa Council sources told Reuters.