New York coffee falls

US arabica coffee closed lower on Tuesday after falling to a three-week low on heavy July/September spreading ahead of the front-month's first notice day on Thursday, said traders who also cited weakness in the robusta market.
"The biggest things really are following London and first notice day for July (arabica) on Thursday. Everyone who was speculating has to get out of those positions," one dealer said. "A lot of it is hedges that are being rolled." New York Board of Trade open-outcry July coffee closed down 1.85 cents at $1.1335 per lb. after trading from $1.1485 to $1.1265.
Benchmark September slid 1.25 to $1.1580 and dealt $1.1710 to $1.1460, which marked a low last seen May 31. The rest retreated 1.20 to 1.30 cents. Technical liquidation was another culprit in the drop, dealers said. On the IntercontinentalExchange NYBOT electronic platform at 1:43 pm EDT (1743 GMT), September coffee was 1.25 cents lower at $1.1580.
In London, robusta futures closed mixed, with Liffe September coffee down $3 at $1,873 per tonne after trading $1,840 to $1,885. "Both September New York arabica and September London robusta coffee futures are experiencing short-term corrections lower within medium-term upturned," said Veronique Lashinski, analyst for Fimat USA in Chicago, in a report on Tuesday.
The key arabica contract is positioned to challenge the $1.20 level after closing above $1.13, Lashinski said, adding a potential inverse head and shoulders was developing on a longer-term basis, with the neckline horizontal at $1.20.
A break of that level would be a "major bullish development". NYBOT estimated 10,359 lots traded in New York open-outcry with traders estimating heavy 21,410 contracts traded on the ICE screen by 1:15 pm EDT. This compares to the 5,907 lots officially tallied in floor trade on Monday, when a heavy 28,780 traded on the ICE electronic platform.
As of June 18, open interest dropped 3,760 lots to 156,284 contracts. Meanwhile, in the No 1 robusta producer, several Vietnamese coffee exporters have been delaying loading with export quotations rising about 16 percent in the past month, traders said on Tuesday.
They said Vietnam has started offering fresh beans from the next harvest, which is expected to come in from late October. Weather in No 1 coffee producer Brazil should remain mostly dry amid near to above-normal temperatures through on Sunday, DTN Meteorlogix forecast.