Coffee prices pushed higher Tuesday as trend traders took advantage of relatively low prices to buy.
Nearby coffee for July delivery ended 0.45 cent, or 0.8%, higher at $1.3355 a pound on ICE Futures U.S.
Coffee prices are stuck within a narrow $1.30 to $1.40 range the market has occupied for much of 2010. Expectations for a bumper harvest from Brazil, the world's top coffee producer, have kept a lid on prices. The market rose to three-week highs June 2 as traders bought on fears cold weather in Brazil could result in frost that damages coffee trees. But weather premium has diminished, leaving futures at relative lows.
Coffee rose Tuesday as speculative fund traders, like banks and hedge funds, took the chance to buy at less expensive prices, said Sterling Smith, market analyst at Country Hedging in St. Paul Minnesota.
"Right now, [the coffee market] is a technical trader's dream," Smith said. "Buy at support sell at resistance."
The market will continue within that range until fresh market-specific news provides momentum, Smith said.
He noted that the fund-related activity makes coffee prone to influence from outside markets, such as equities. These markets have been keeping a close watch on macroeconomic conditions -- particularly the sovereign debt risk in Europe.
In general, the high-quality arabica coffee is in short supply following two seasons of poor harvests in Colombia, Central America and Mexico. Arabicas from Brazil are expected to help plug the gap. Brazil's harvest of arabica beans, the main export coffee, has recently started and should run through September.
Brazil's 2010 coffee crop is expected to be 45.8 million 60-kilogram bags, the agricultural survey group of Brazil's Census Bureau, the IBGE, said Tuesday.
ICE coffee warehouse stocks decreased by 9,453 60-kilogram bags Tuesday to total 2.288 million bags, according to exchange data.
ICE coffee open interest -- the number of active positions left at the end of the session -- increased by 146 lots Monday to total 138,378 lots, according to
exchange data.
Volume was estimated at 36,915 lots, according to exchange data. In options, approximately 5,728 calls and 2,111 put options traded.
ICE Change Range Liffe Change
Jly $1.3355 +0.45c $1.3280-$1.3410 $1,341 +$3
Sep $1.3150 +0.50c $1.3430-$1.3550 $1,375 +$2
Nearby coffee for July delivery ended 0.45 cent, or 0.8%, higher at $1.3355 a pound on ICE Futures U.S.
Coffee prices are stuck within a narrow $1.30 to $1.40 range the market has occupied for much of 2010. Expectations for a bumper harvest from Brazil, the world's top coffee producer, have kept a lid on prices. The market rose to three-week highs June 2 as traders bought on fears cold weather in Brazil could result in frost that damages coffee trees. But weather premium has diminished, leaving futures at relative lows.
Coffee rose Tuesday as speculative fund traders, like banks and hedge funds, took the chance to buy at less expensive prices, said Sterling Smith, market analyst at Country Hedging in St. Paul Minnesota.
"Right now, [the coffee market] is a technical trader's dream," Smith said. "Buy at support sell at resistance."
The market will continue within that range until fresh market-specific news provides momentum, Smith said.
He noted that the fund-related activity makes coffee prone to influence from outside markets, such as equities. These markets have been keeping a close watch on macroeconomic conditions -- particularly the sovereign debt risk in Europe.
In general, the high-quality arabica coffee is in short supply following two seasons of poor harvests in Colombia, Central America and Mexico. Arabicas from Brazil are expected to help plug the gap. Brazil's harvest of arabica beans, the main export coffee, has recently started and should run through September.
Brazil's 2010 coffee crop is expected to be 45.8 million 60-kilogram bags, the agricultural survey group of Brazil's Census Bureau, the IBGE, said Tuesday.
ICE coffee warehouse stocks decreased by 9,453 60-kilogram bags Tuesday to total 2.288 million bags, according to exchange data.
ICE coffee open interest -- the number of active positions left at the end of the session -- increased by 146 lots Monday to total 138,378 lots, according to
exchange data.
Volume was estimated at 36,915 lots, according to exchange data. In options, approximately 5,728 calls and 2,111 put options traded.
ICE Change Range Liffe Change
Jly $1.3355 +0.45c $1.3280-$1.3410 $1,341 +$3
Sep $1.3150 +0.50c $1.3430-$1.3550 $1,375 +$2
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