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CSCE coffee closes flat, locals erase early losses

NEW YORK: CSCE coffee futures finished flat on Monday as late local buying wiped out losses caused by choppy speculator pressure, with market focus fixed firmly on a meeting next week to discuss a stock plan to boost prices.

"This thing is putting me to sleep. The locals and the specs were pushing this thing back and forth. The local buying just steadied us up at the close," a broker said.

May arabica settled unchanged at 103.15 cents a lb, trading 101.35 to 103.25 cents, matching its high on Friday.

Second month July ended flat at 105.80 cents, moving from 105.90 and 104.20 cents.

Except for December 2000, which eased 0.10 to 111.90 cents, the rest closed unchanged.

Early speculative and local pressure knocked coffee down to its lows, but no follow-through was forthcoming and May failed to approach the Friday low of 101.05 cents, traders said.

Arabica futures then gradually recovered on local activity, they said.

"It was chop city in here," a floor dealer said.

"The light local covering got us back up but that was it," a Miami-based broker added.

Market attention was on the upcoming meeting of the Association of Coffee Producing Countries (ACPC) in London on April 4-5 to take up a retention plan to shore up coffee prices.

"There's some nervousness the producers will not be able to put a plan together and that is putting futures under the gun," a dealer said.

The ACPC will be taking up a proposal by top grower and exporter Brazil and second leading producer Colombia for a plan to withhold up to 6.0 million 60-kg bags of coffee to boost futures.

"A retention scheme can only be regarded as potentially price-supportive if it is viewed as credible by the world market," Prudential Securities softs analyst Arthur Stevenson said in a weekly futures report made available Monday.

"The plan's credibility hingest on several factors, including the availability of stock financing and expanded ACPC membership. Various important origins, including Guatemala, Mexico and Vietnam, have voiced opposition to an official retention plan," he added.

In the meantime, arabica prices in New York should firm slightly although benchmark futures have been fairly stable in a range from 98-110 cents a lb since late February.

"We lean to the upside in this market, but would need to see the (CSCE) May contract trade through the 110-111 (cents) level before becoming more enthusiastic about the market's upside potential," Stevenson said.

On a technical basis, traders said May arabica should see support at 100.25, followed by the psychological level of 100 cents, then the recent low of 98.40 cents. Resistance would be at 107, then 109-110 cents.

Volume was an estimated 5,525 lots against Friday's official tally of 6,302 lots.

Call volume reached an estimated 1,135 lots, whilst puts were seen at 273 lots.

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