DJ ICE Cocoa Review: ICE Cocoa Swings Up On Spillover Buying
NEW YORK (Dow Jones)--Cocoa prices rose Wednesday as speculative interest in
commodities spilled over into the market.

Nearby cocoa for September delivery cocoa settled $60, or 2%, higher at
$3,118 a metric ton on ICE Futures U.S. The settlement was the highest in two
weeks for a nearby contract.

Cocoa is taking cues from outside markets and technical chart indicators
during an intrinsically slow time of the year. World cocoa bean production is
light from May to September, and demand is also seasonally low. However, both
supply and demand pick up in September and October as the West Africa main bean
harvest begins. At the same time, confectioners begin to buy in preparation for
winter holiday chocolate demand.

Speculative traders, like banks and hedge funds, bought agricultural
commodities Wednesday, which lifted cocoa prices. Coffee and sugar were also
stronger as cocoa prices settled.

"Fund buying in anything that you can eat seems to be the word of the day,"
said Sterling Smith, market analyst at Country Hedging in St. Paul, Minn.

Technical buying kicked in at $3,112 and pushed September futures up to a
two-week intraday high at $3,169 midday, Smith said.

Arrivals of cocoa beans from No. 1 producer Ivory Coast's farms at the ports
in Oct. 1-Aug. 1, are seen down 1.7% from the same period last season,
according to industry estimates obtained Wednesday. Aging orchards, a lack of
investment, delayed sector reforms and the relative popularity of rubber trees
are undermining cocoa output in the world's biggest producer.

Volume was an estimated 32,816 contracts to the point of settlement,
according to exchange data. In options, approximately 98 calls and 398 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--increased by 569 positions Tuesday to total 123,629, the exchange
reported.

Close Change Range (To the point of settlement)
Sep $3,118 +$60 $3,066-$3,169
Dec $3,139 +448 $3,092-$3,189