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CSCE coffee settles easier in technical setback

NEW YORK: CSCE coffee futures ended lower on Tuesday when origin sales and speculative profit-taking knocked arabicas back after an upside probe failed to uncover follow-through momentum.

"They (the specs) tried to see if they can get it any higher. Once it failed, it fell on its face again. Coffee just did not have any legs under it," a broker said.

May arabica lost 1.70 to finish at 100.40 cents a lb, trading from 104-100.25 cents.

Spot March dropped 1.75 to end at 99.90 cents. The rest were 2.00-0.40 cents easier.

Speculative buying several times throughout the session sought to push arabica futures to higher ground, with May initially breaching near-term resistance at 103.25 to hit an early high of 103.50 cents, floor sources said.

Another speculative-led advance eventually pushed the May contract to its high for the day of 104 cents, where grower sales and speculative profit-taking prevented it from going any higher, they said.

"One brokerage on the floor sold it heavily near the close. I suppose they just did not want it to have a good finish," a Miami-based broker said.

Traders said the market is running into persistent origin selling every time it gets near the 105-cents mark.

Fundamentally, the upside outlook is not promising since supplies are plentiful especially for robusta beans.

"The Brazilian robust crop is in good shape, but the arabica beans there may suffer in quality," a broker who had visited the world's leading producer of coffee said.

On a technical basis, May arabica should see support at the recent low of 98.40 cents from where it bounced. Resistance would be at the session peak of 104 and then on to 105 cents, where a lot of grower selling is believed to be waiting.

Volume traded reached an estimated 10,958 lots, against the estimated previous volume of 8,409 lots.

Call volume reached an estimated 2,783 lots, whilst puts were seen at 2,242 lots.

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