20000310CSCE coffee ends down, awaits retention plan news

NEW YORK: CSCE coffee futures closed slightly lower on Wednesday on light fund and local selling, but late short covering allowed prices to close just below session peaks.

"It was just some local selling pushing prices lower. Until we get more concrete news (about the retention plan) I think the market has basically rallied as much as it will this week," said Boyd Cruel, Chicago-based softs analyst with Alaron Trading Corporation.

Rumours concerning coffee retention plans by top producer Brazil continue to circulate, with many players hoping for an update on talks as Carnival celebrations draw to a close.

Active May settled down 0.75 cent at 108 cents a lb after trading 108.70-106.50 cents. Spot March closed at 107.40 cents, 1.00 cent lower. July fell 0.75 to 110.50 cents and the rest shed 0.20-0.75 cent, with the exception of July 20001 which rose 0.30 cent.

Arabicas fell to the day's lows shortly after the opening bell on light fund and local selling, but found support at the 106.50 cents in May delivery, floor brokers said.

"It was some light fund selling, that's why it dropped a little. It came back up just on light buying from all around the ring," one floor dealer said.

"I think it's sort of run out of steam here, although it ended a little bit positive. I think people will take profits at this point, those who got long," Ann Prendergast, softs analyst with brokerage Refco Inc. said.

But Prendergast said that on the other hand, there was no reason for prices to fall sharply either. "I think one of the other reasons supporting the (recent) move up is that it didn't go down when everyone thought it was going to test the mid-nineties."

Brokers and traders were expecting quiet trading to continue, even though Brazil would be coming back into the market, due to the National Coffee Association's annual conference which starts Thursday.

On a technical basis, traders said May arabicas should see support at 102.50, then 100.25-100 cents, followed by 99 cents. Resistance would be at 109.50 then 110 cents.

Volume was an estimated 8,678 lots, against the official previous volume of 8,612 lots.

Call volume reached an estimated 3,882 lots, whilst puts were seen at 1,172 lots.

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