US arabica coffee futures ended down on Monday, near a one-week low, as players returned from four days off to selling in London robusta coffee and a drop in the Brazilian real against the dollar, traders said. "Robusta was coming off and if you look at the Brazilian real, the currency got knocked down against the dollar.
That also brought some selling to New York (coffee)," said Rodrigo da Costa, vice president, institutional sales at FIMAT USA. Participants were returning to the coffee market for the first time since on Wednesday. Soft commodity markets remained shut on Thursday and Friday for the Thanksgiving holiday. In open-outcry trade, ICE March arabica settled with 1.0-cent losses at $1.2560 per lb.
The session range set a one-week low at $1.2550, down from the high at $1.2680. The rest finished from 0.60 to 1.35 cents lower. On the electronic platform, March arabica was down 0.90 cent or 0.71 percent at $1.2570 by 1:46 pm EST (1846 GMT). The day's range ran from $1.2560 to $1.2720 a lb. As to weather selling was expected to continue on Tuesday, da Costa said he thought a lot depended on what happened with the dollar.
"Right now it's a currency thing. If we see more devaluation of the real (against the dollar), then you could see more selling in the coffee market," he said. On Monday, Brazil's currency weakened on Monday for the sixth straight session on strong dollar outflows.
The real fell to its weakest level in a month as investors resumed dollar buying, in part because companies bought dollars to send remittances of dividends and profits abroad. ICE estimated final open-outcry volume at paltry 942 lots on Monday, compared with Wednesday's total tally of 13,236 contracts.
ICE said 9,227 lots of that business were conducted in screen business. Open interest fell by 1,025 lots to 152,566 contracts as of November 21, exchange data showed.
In London, robusta coffee futures dropped as top robusta producer Vietnam's harvest resumed after typhoon-linked rains caused delays. Robusta prices ended lower with benchmark January coffee down $27 at $1,809 a tonne, while spot November fell $33 to $2,296 per tonne.
Also in Vietnam, a provincial government official said. Coffee exports from the Asian country's top growing province of Daklak will fall 6 percent to 5.2 million 60-kg bags in 2008 following a drop in output forecasts due to bad weather.
Daklak was projected to ship 5.5 million bags in the 12 months ending next month, nearly 18 percent up from its 2006 shipment, the Daklak official said. Weather service Meteorlogix's DTN forecasters said top arabica producer Brazil's main growing region showed favourable conditions for flowering trees, with scattered showers turning to dry conditions later in the week.
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