The US arabica coffee futures staged a modest recovery on Wednesday, settling on positive ground after sliding some 11 percent the past three trading sessions. The New York Board of Trade's front-month September contract rose 1.90 cents, or about 2 percent, to finish at 98.45 cents a lb., near the top of a trading range from 96.70 to 98.60 cents.
"We saw a corrective bounce. The stronger close suggests that we might be able to probe a gap from Monday, so we'll have to see," a trader said, referring to Monday's low trade of 98.75 and Tuesday's peak at 99.90 cents.
"There was some roaster buying in December and some scale-down buying in September," he added.
Among other arabicas, December gained 1.90 cents to 102.90 cents a lb., and longer-dated deliveries climbed 1.85 cents across the board.
From Friday to Tuesday funds and speculators dumped their long positions, sending the benchmark arabica contract down about 11 percent to its lowest level since November 24.
Futures prices for the lower quality robusta bean plunged about 12 percent this week in London, before finishing little changed Wednesday. Liffe's benchmark September ended $4 stronger at $1,081 a tonne.
Dealers said recent low prices had attracted roasters to the market, even though fundamental conditions for large producing countries appeared to be the same.
In Brazil, the world's biggest coffee producer, harvest conditions during the next 7 days will be "generally favourable," with no crop damaging cold temperatures in sight, predicted US forecaster Meteorlogix.
Still, market observers said they expected a smaller 2005/06 harvest in Brazil than the previous season because of a downturn in the country's biennial crop cycle.
Government and private forecasts for Brazil's new crop range anywhere from 31 million to 39 million 60-kg bags.
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