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Cocoa regains lost ground as commodities rally

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Cocoa led a rally in agricultural commodities which, spurred by a cocktail of supply worries, rebuffed the bearish influence of other financial markets.

Traders said that technical factors were behind a rise of $107, or 4.2%, to $2,655 a tonne in New York cocoa, after prices tumbled 9% on Monday. Jan Vingerhoets, the head of the International Cocoa Organization, told Reuters that the shortfall in cocoa supplies would be below 100,000 tonnes this year, less than many analysts had thought.

However, supply concerns boosted other commodities. Benchmark June palm oil added 35 ringitt, or 1.6%, a tonne to close at 2,180 ringgit a tonne on Bursa Malaysia on expectations that figures on Friday will show Malaysian palm oil stocks below 1.4m tonnes.

Oil World, the influential oilseeds analysis group, forecast a figure of 1.3m-1.4m tonnes, adding that "bull run in palm oil prices may not have run its course".

It added: "The current lean production period is obviously leaner than is usually the case."

Frost worries

Among cereals, wheat made late ground over fears of the damage frost may cause to US winter wheat. The rebound came too late to help prices in London, where May wheat closed down �1.25 at �109.25 a tonne. A decline in the euro helped Paris wheat finish E1 higher at E138.75.

However, US prices firmed. In Kansas, the main home of hard red winter wheat trading, May contracts gained 6.75 cents to $6.09 � a bushel.

Chicago wheat was 4.25 cents higher at $5.62 � a bushel.

Chicago soybeans also traded higher, adding 8.25 cents to 10.02 � a bushel. The rise reflected "talk of more Chinese demand for US beans at the Gulf", Vic Lespinasse at said.

Corn, however, lost ground, standing 5 cents lower at $4.00 � a bushel.

Beyond agriculturals, many other commodities fell, dragged lower by fears of a stormy reporting season for major US companies. New York light crude dropped 2.7% below $50 barrel, with Brent crude down 1.3% at $51.46 a barrel.


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