New York Board of Trade arabica coffee futures fell more than 2 percent on Wednesday, with fund liquidation and producer hedging driving the front-month price back below a psychological level of $1 per pound, traders said.
NYBOT's September arabica tumbled 2.50 cents to 99.35 cents a lb., near the bottom of a trading range from 98.30 cents to 101 cents. December shed 2.55 cents to 103.70 cents, and back month arabicas lost 2.45 to 2.75 cents.
Arabica futures started their descent at the start of trading on the heels of weak coffee prices in futures markets in London and Sao Paulo. "With London coming in a little weaker today, the selling migrated over to our market.
We gapped lower and we took out some of the support levels that we were looking at today," said a trader. "There was some fund liquidation and there was also some light origin selling that forced locals who were hanging on to any kind of longs to liquidate and go short," he added.
NYBOT estimated trading volume in arabica futures reached 12,808 contracts, well above the previous session's tally of 9,403 lots. Traders said they expect coffee roasters to increase their fixing or buying when the September contract gets close to 96.15 cents, which was the bottom trade on July 19.
Any move below 96.15 cents will be September's lowest price since November 2004.
Meanwhile, coffee growers in No 1 producer Brazil can expect to get good harvest weather during the next seventy days predicted US forecaster Meteorlogix.
Brazil's coffee belt will see mostly dry weather over the next week with no damaging cold temperatures in sight, the weather service said in its latest outlook.
Brazil's government is slated to release its third official forecast for the 2005/06-coffee crop on August 12. In April, Brazilian officials projected the crop at 32.5 million 60-kg bags, up from 31.9 million bags they estimated in December.
Brazil harvested 38.6 million bags in 2004/05.
Comments
Comments are closed.