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CSCE coffee settles mixed in lackluster trading

NEW YORK: CSCE coffee futures put in a mixed performance at Friday's finish, with spot March slightly off after trading in a narrow range of 200 points, traders and brokers said.

March arabicas finished 0.05 cent weaker at 112.90 cents a lb after trading 114.50-112.50 cents. May gained 0.10 to 115.70 cents. The rest rose 0.05 with the exception of March 2001 which lost 0.05 cent.

Early trade buying activated some buy stops above 114 cents in March delivery, but the bounce was short-lived and came off on some light origin selling and long liquidation, traders said.

"It just retreated and hung around 113 and then some of the locals sold it a little more," one broker said.

Brazil's coffee shipments could see a squeeze over the next few months while foreign roasters approach other suppliers and tightening differentials trigger a flood of washouts, industry sources said Friday.

Tightening differentials have made it more attractive to "wash out" contracts when it comes to covering previously-made sales for this year's first quarter and buying actual coffee beans.

Technicians said support for March arabicas remained around 109.50 cents, with resistance likely at 116 then 118-120 cents.

Volume was an estimated 7,038 lots against Thursday's official tally of 7,163 lots. Call volume reached an estimated 3,104 lots, whilst puts were seen at 1,091 lots.

The nine-day relative strength index (RSI) of March coffee was stable at 49 at the close on Friday.

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.-Reuters