CSCE coffee futures lower amid erratic session

CSCE coffee futures finished an erratic session lower on Tuesday as speculators and locals tried to make money in a narrow trading band, brokers said.
"There was no big direction in the market from funds and no big producer selling. Specs and locals were trying to take money from each other," said a broker at a major financial institution.
Key May Arabia settled down 0.95 cent at 76.40 cents per lb after trading 75.80 to 77.60 cents.
The market shrugged off news that the United States indicated it would look to rejoin the International Coffee Organisation (ICO). Colombian President Alvaro Uribe said on Tuesday the Bush administration plans to rejoin the ICO, a group that is facing slumping prices due to a worldwide oversupply of coffee.
The Colombians said participation of the US, the world's top coffee consumer, in the ICO is essential to lift prices.
The US withdrew from the body more than a decade ago, in disagreement with a coffee quota system.
Overproduction by producing nations later led to a global slump in prices, pushing thousands of farmers into poverty.
Analysts were sceptical that US participation in the ICO would result in higher prices as the ICO is a major provider of statistical information and the US left the ICO because of the quota system.
"A quota system might help raise coffee prices if it was effective, but meanwhile the key parties to an ICO pact will argue those quotas forever," said one coffee buyer.
May delivery crossed the unchanged level several times. At its session low, coffee brushed the 40-day simple moving average, with brokers saying a close below this chart point at 75.70 cents would be bearish.
Another broker said sell-stop orders were building below 75 cents and this could be a magnet for speculators.
Estimated futures volume improved slightly to 10,436 contracts, up from 9,678 lots on Monday.
In the options pit, 2,291 calls and 4,044 puts changed hands.
Chartists peg support for May at 75.35 followed by 74.50 cents, with resistance at 77.75 and 78.50 cents. CSCE is a subsidiary of the New York Board of Trade.