New York/London, Oct 21 - U.S. cocoa futures closed at the highest level in almost 30 years on Wednesday, eking out the record as investors bought amid a weak dollar and a sign that the appetite for chocolate may be improving.
Coffee and sugar futures also finished higher on support from the weak dollar.
In cocoa, the weak dollar, strong results from British confectioner Cadbury and firm charts pushed the spot contract up to the highest level since February 1980.
"The Cadbury story is a better than expected result for Q3, signaling improving demand," said Ricardo Santos, head of the agri-commodity brokerage at BNP Paribas Fortis in London.
Cadbury beat sales forecasts and raised targets in a bumper third-quarter trading report, pushing up its shares and pressuring suitor Kraft to come up with a bigger bid to win its takeover battle.
ICE December cocoa closed up $51 to close at $3,384 per tonne, the highest settlement for the front-month position since February 1980.
The stronger pound, however, prevented stronger gains in London cocoa futures, which are denominated in sterling.
London (Liffe) March cocoa finished up 7 pounds at 2,178 pounds per tonne.
Dealers talked of expected increased allocations by the end of October into cocoa by Deutsche Bank's exchange-traded commodity funds.
"They (Deutsche Bank) have finished their rebalancing," said Sterling Smith, an analyst for Country Hedging Inc in St. Paul, Minnesota.
Smith was citing information from a private analyst's report, which he said was reliable.
"They're done most likely with their liquidation portion. They were being forced to lower their number of positions in certain markets and being required to buy more in some other markets," Smith said.
Cocoa and cotton were the two commodities of most interest, he said.
Sugar futures rallied up on light investor buying, supported by the softer dollar, and analysts said the long-term outlook for the market is for futures to move up in the weeks ahead. Dealings were light as many market players were still away at the Sugar Week in top grower Brazil.
ICE March raw sugar futures climbed 0.45 cent to conclude at 24.04 cents per lb, while Liffe December white sugar closed up $7.40 at $598.60 per tonne.
Traders said they continued to hear talk of Indian inquiries, but the absence of many players meant little in the way of actual business being done.
"The fundamentals continue to support, but prices are already pretty high," said Jack Scoville, an analyst for brokers The Price Futures Group in Chicago.
Dealers' attention remained focused on Brazil sugar conference week, as they tried to gauge the impact of excessive and persistent rainfall on yields in the world's top producer.
Arabica coffee futures rebounded higher, on the soft dollar and support from the strong commodity complex.
Meanwhile, robusta coffee dealers focused on the arrival of the new crop in top grower Vietnam.
ICE December arabicas rose 2.50 cents to $1.4430 per lb. London November robusta coffee ended $4 up at $1,450 a tonne.