DJ ICE Cocoa Review: Prices Rise In Summer Range Trading
NEW YORK (Dow Jones)--Cocoa prices inched higher Tuesday, drifting within
range during a seasonally light session.

Nearby cocoa for September delivery cocoa settled $7, or 0.2%, higher at
$2,980 a metric ton on ICE Futures U.S.

Cocoa prices have been seesawing within a narrow trading band since May. The
tight range coincides with an annual period of mild supply and demand. Incoming
beans taper off from West Africa--the world's top source of cocoa. Production
picks up between September and October, when cocoa manufacturers begin to stock
to meet chocolate demand during the holiday season.

"The summer tends to be the quiet time of year in this market," said Boyd
Cruel, senior softs analyst at Vision Financial Markets in Chicago.

The October contract is likely to continue within a $2,900 to $3,200 range
through the fall, Cruel said.

He added that cocoa prices have underlying psychological support as some
traders eye supplies held by the London exchange. NYSE Liffe cocoa rallied in
early July as a traders took delivery of nearly all of the exchange's supplies.
ICE futures jumped in sympathy. However, when it was revealed the receivers
were speculators rather than end-users, prices backed off. Cocoa traders
continue to eye the possibility of a similar runup when the October contract
expires.

The International Cocoa Organization estimates world production will fall
nearly 1% short of demand in the current 2009-10 season, which ends Sept. 30.
The amount of beans ground by confectioners to make chocolate is anticipated to
be 4% higher than last year at 3.579 million tons, the organization said in
late May. Demand for beans has rebounded from recession lows in tandem with the
world economy.

Volume was estimated 8,851 contracts through the settlement, according to
exchange data. In options, approximately 19 calls and 840 puts traded on the
floor in the same timeframe.

ICE cocoa open interest--the number of active positions left at the end of
the session--decreased by 328 positions Monday to total 125,620, the exchange
reported.

Close Change Range (To the point of settlement) Liffe Close
Change
Sep $2,980 +$7 $2,954-$3,026 Sep
GBP2,280 +GBP1
Dec $3,003 +$4 $2,978-$3,050 Dec
GPB2,170 +GBP2