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CSCE coffee closes higher in rangebound activities

NEW YORK: CSCE coffee futures settled higher on Thursday, on continued light industry support, as participants tried unsuccessfully to break the market out of the current trading range, traders and brokers said.

"I don't think it was a bad close, but if it could have closed above 114.25, it would have been structurally quite constructive," one New York-based broker said.

March arabica KCH0 finished 0.70 higher at 112.95 cents a lb, trading 113.50-111.25 cents. May gained 0.65 to end the day at 115.60 cents.

The rest added on between 0.55-0.65 cent.

Locals dominated trading activities on Thursday, with some light roaster support continuing to come in, traders said.

"They (industry) were a little more aggressive. It sounds like there's more industry buying to come in against March, than there is producer selling to get done," one broker said.

But one Toronto-based roaster said that although physical differentials had tightened, this was being more than offset by abundant Central American shipments.

"The only thing that's going on out there is that differentials are changing. Some of that is by virtue of supply and demand and some of it is people being pigs about it, thinking they can get more," he said.

Fundamentally, a strike by truckers in Colombia's normally bustling port of Buenaventura entered its fifth day Thursday, with no sign of a breakthrough in efforts to end the stoppage.

Colombia's private coffee exporters say they have not yet been affected by the strike, but it could begin to disrupt some shipments if it holds past the middle of next week.

Coffee traders continue to talk about a rumoured increase in Colombia's coffee quality premium, but said that the world's second biggest coffee producer would lose market share if they were to implement a hike.

"Anyone using Colombians in a blend or something that doesn't require the Juan Valdez label is going to put something else in that is going to be better quality and cheaper," the roaster said.

Technicians said support for March arabica was around 109.50 cents, while resistance will likely be found at 116 cents, then 118-120 cents.

Volume traded reached an estimated 7,189 lots, against the previous official volume of 7,616 lots. Call volume reached an estimated 1,874 lots, whilst puts were seen at 858 lots.

The nine-day relative strength index (RSI) of March coffee stood at 49 at the close on Thursday, against 42 previously.

Technicians normally believe an RSI reading of 30 or less is an indication that the market is oversold, while 70 or more is usually a sign it is overbought on a short-term basis.

The CSCE is a subsidiary of the New York Board of Trade.-Reuters