A strong demand outlook boosted cocoa to a close three-year high on Monday. Dealers remained concerned with the damage done to crops by a recent drought in Brazil, the world's top grower, causing ICE U.S. coffee futures to steady in light volumes on Wednesday.
Benchmark ICE December cocoa futures were down $14, or 0.4 percent, at $3,224 per ton, slightly under Tuesday's session high at $3,244, the highest level since late July 2011.
Kash Kamal, research analyst with Sucden Financial, said, "Further gains on the upside could set the stage for a breakout above $3,240 before attempting to target levels towards $3,250," according to Reuters.
December cocoa futures on Liffe were up 4 pounds, or 0.2 percent, trading at 2,017 pounds per ton in moderate volume of 1,618 lots. Liffe November robusta futures climbed $5, or 0.3 percent, at $1,981 a ton in light volume of 946 lots, reports The Business Recorder.
Dealers say that they expect prices to stay capricious as uncertainty remains over the health and size of Brazil's current crop. After two months of holding a premium, September spreading was at a $10 discount to December from a $2 discount on Monday.
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