Coffee prices were little changed Tuesday as light producer selling met speculative fund buying on the back of a sizeable rally.
Nearby coffee for July delivery ended 0.15 cent, or 0.1%, higher at $1.5910 a pound on ICE Futures U.S. The most-active September contract settled 0.05 cent, or 0.03% lower at $1.6075 a pound.
Within the last two weeks, coffee prices have broken out of a tight 10- cent range the market held for most of 2010. Dwindling coffee supplies after two years of poor harvests in Colombia and Central America supported prices while expectations for a bumper crop capped gains. In the last three weeks, internal trading activity triggered buying that led futures to 27-month highs Friday.
Now the market, known for its volatility, is treading water as traders await a decisive move from either speculative funds, like banks and hedge funds, or producers in Brazil, who sell contracts to hedge physical beans.
"Every week that passes, more coffee will be ready to be sold in Brazil, and farmers will not wait to sell if prices remain where they are," said Rodrigo Costa, vice president of institutional sales at Newedge USA in New York.
Brazil's incoming 2010-11 coffee crop is forecast at a record 55.3 million bags with 41.8 million bags of arabica beans. An estimated 10% of those arabica beans are expected to be of the high-quality washed beans that parallel ICE coffee specifications.
"My bias is still to the downside in this market," said Boyd Cruel, senior softs analyst at Vision FinancialMarkets
in Chicago. "Brazil's crop is still expected to be large."
A September close below $1.58 would indicate a decline toward $1.5540, a technical analyst said. If the contract settled above 163.50, however, it could go on to test $1.6550.
ICE coffee warehouse stocks increased by 1,451 60-kilogram bags Tuesday to total 2.51 million bags, according to exchangedata .
ICE coffee open interest--the number of active positions left at the end of the session--increased by 394 lots Monday to total 159,676 lots, according to exchange data.
Volume was estimated at 18,817 lots, according to exchange data. In options, approximately 4,189 calls and 8,858 put options traded.
ICE Change Range Liffe Change
Jly $1.5910 +0.15c $1.5720-$1.6025 Jly $1,532 -$6
Sep $1.6075 -0.05c $1.5745-$1.6245 Sep $1,569 -$4
Nearby coffee for July delivery ended 0.15 cent, or 0.1%, higher at $1.5910 a pound on ICE Futures U.S. The most-active September contract settled 0.05 cent, or 0.03% lower at $1.6075 a pound.
Within the last two weeks, coffee prices have broken out of a tight 10- cent range the market held for most of 2010. Dwindling coffee supplies after two years of poor harvests in Colombia and Central America supported prices while expectations for a bumper crop capped gains. In the last three weeks, internal trading activity triggered buying that led futures to 27-month highs Friday.
Now the market, known for its volatility, is treading water as traders await a decisive move from either speculative funds, like banks and hedge funds, or producers in Brazil, who sell contracts to hedge physical beans.
"Every week that passes, more coffee will be ready to be sold in Brazil, and farmers will not wait to sell if prices remain where they are," said Rodrigo Costa, vice president of institutional sales at Newedge USA in New York.
Brazil's incoming 2010-11 coffee crop is forecast at a record 55.3 million bags with 41.8 million bags of arabica beans. An estimated 10% of those arabica beans are expected to be of the high-quality washed beans that parallel ICE coffee specifications.
"My bias is still to the downside in this market," said Boyd Cruel, senior softs analyst at Vision Financial
A September close below $1.58 would indicate a decline toward $1.5540, a technical analyst said. If the contract settled above 163.50, however, it could go on to test $1.6550.
ICE coffee warehouse stocks increased by 1,451 60-kilogram bags Tuesday to total 2.51 million bags, according to exchange
ICE coffee open interest--the number of active positions left at the end of the session--increased by 394 lots Monday to total 159,676 lots, according to exchange data.
Volume was estimated at 18,817 lots, according to exchange data. In options, approximately 4,189 calls and 8,858 put options traded.
ICE Change Range Liffe Change
Jly $1.5910 +0.15c $1.5720-$1.6025 Jly $1,532 -$6
Sep $1.6075 -0.05c $1.5745-$1.6245 Sep $1,569 -$4
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