Cocoa futures on Intercontinental Exchange (ICE) rose to a fresh five-week high on Tuesday, although the run-up appeared to be losing momentum, while London prices eased as sterling rose against the dollar, dealers said.
Cocoa prices have climbed during the last few days, boosted by fund buying across soft commodity markets and reduced prospects for this year's Ivory Coast mid-crop.
“It (cocoa) is pretty toppish here. I think the market could fall off a bit from here unless we see some aggressive fund buying,” one dealer said.
May cocoa on ICE gained $16 to close at $2,609 per tonne after rising to a peak of $2,626, the highest level for the contract since mid-February. The contract has risen by more than $400 since early March.
Prices in London eased slightly as sterling rallied against the dollar, with May closing down one pound at 1,921 pounds a tonne.
Dealers said they were closely watching West African mid-crop progress and talked of concerns over swollen shoot virus and black pod disease in West African producers.
Last week pod counters estimated the Ivory Coast mid-crop may be as low as 200,000 tonnes, well below last year's 315,000-tonne harvest.
Dealers said the crop looked likely to be below last year although sunny weather may have improved prospects, with current estimates around 250,000 to 300,000 tonnes.
Asked about the outlook for the mid crop, one dealer said, “Conditions look not unreasonable.”
Long sunny spells in Ivory Coast's cocoa growing areas last week soothed farmers' fears about disease wrecking the April-September mid-crop, growers said on Monday.