NEW YORK (Dow Jones)--Roaster and speculator buying boosted coffee prices Tuesday as supplies are scarce in the near term.
Nearby coffee for July delivery ended up 2.10 cents, or 1.3%, at $1.6325 a pound on ICE Futures U.S. The most actively traded September contract also settled 2.10 cent, or 1.3%, higher at $1.6565 cents a pound.
Coffee prices have ranged from roughly $1.60 to $1.75 in the last three weeks since spiking 20% in mid June. Prices rallied in light of tight world supplies of high quality arabica beans. Those varieties are difficult to find ahead of the late fall harvest following two years of poor output attributed to bad weather.
Investor risk appetite boosted most commodities and equities prices Tuesday in light of bullish economic outlooks following strong initial corporate earnings. The dollar fell as traders sought riskier bets, which made futures less expensive in other currencies.
The pace of the ongoing coffee harvest in the world's top producer, Brazil, is picking up. The International Coffee Organization said last week it expects Brazil's 2010-11 coffee crop to reach 50 million 60-kilogram bags.
Roasters bought September futures after the contract scraped $1.59 Monday, said Hernando de la Roche, managing director of coffee trading at Hencorp Becstone Futures in Miami. That buoyancy showed speculative traders, like banks and hedge funds, that coffee could move higher. De la Roche said September futures could probe the $1.68 to $1.70 levels in the near term.
Coffee prices are in a sideways "congestion pattern," says Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Fla.
"The longer this market trades sideways without a more sustainable correction, the more likely that another spike higher will be seen," Hackett said in the firm's Money Flow market letter.
However, incoming supplies could push prices into a bearish corrective mode, said Spencer Patton, chief financial officer at Steel Vine Investments in Chicago.
"Every day that ticks by is another day that the Brazilian harvest is easing supply tightness in the market," Patton said.
Total world coffee production for the 2010-11 season is projected between 133 million bags and 135 million bags, according to the ICO.
Volume was estimated at 15,432 lots, according to exchange data. In options, approximately 4,651 calls and 2,084 put options traded.
ICE coffee warehouse stocks decreased by 500 60-kilogram bags Tuesday to total 2.166 million bags, according to exchange data.
ICE coffee open interest--the number of active positions left at the end of the session--increased by 1,615 lots Monday to total 170,056 lots, according to exchange data.
ICE Change Range Liffe Change
Jly $1.6325 +2.10c $1.6325-$1.6450 Jly $1,659 +$16
Sep $1.6565 +2.10c $1.6210-$1.6700 Sep $1,721 +$16
Nearby coffee for July delivery ended up 2.10 cents, or 1.3%, at $1.6325 a pound on ICE Futures U.S. The most actively traded September contract also settled 2.10 cent, or 1.3%, higher at $1.6565 cents a pound.
Coffee prices have ranged from roughly $1.60 to $1.75 in the last three weeks since spiking 20% in mid June. Prices rallied in light of tight world supplies of high quality arabica beans. Those varieties are difficult to find ahead of the late fall harvest following two years of poor output attributed to bad weather.
Investor risk appetite boosted most commodities and equities prices Tuesday in light of bullish economic outlooks following strong initial corporate earnings. The dollar fell as traders sought riskier bets, which made futures less expensive in other currencies.
The pace of the ongoing coffee harvest in the world's top producer, Brazil, is picking up. The International Coffee Organization said last week it expects Brazil's 2010-11 coffee crop to reach 50 million 60-kilogram bags.
Roasters bought September futures after the contract scraped $1.59 Monday, said Hernando de la Roche, managing director of coffee trading at Hencorp Becstone Futures in Miami. That buoyancy showed speculative traders, like banks and hedge funds, that coffee could move higher. De la Roche said September futures could probe the $1.68 to $1.70 levels in the near term.
Coffee prices are in a sideways "congestion pattern," says Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Fla.
"The longer this market trades sideways without a more sustainable correction, the more likely that another spike higher will be seen," Hackett said in the firm's Money Flow market letter.
However, incoming supplies could push prices into a bearish corrective mode, said Spencer Patton, chief financial officer at Steel Vine Investments in Chicago.
"Every day that ticks by is another day that the Brazilian harvest is easing supply tightness in the market," Patton said.
Total world coffee production for the 2010-11 season is projected between 133 million bags and 135 million bags, according to the ICO.
Volume was estimated at 15,432 lots, according to exchange data. In options, approximately 4,651 calls and 2,084 put options traded.
ICE coffee warehouse stocks decreased by 500 60-kilogram bags Tuesday to total 2.166 million bags, according to exchange data.
ICE coffee open interest--the number of active positions left at the end of the session--increased by 1,615 lots Monday to total 170,056 lots, according to exchange data.
ICE Change Range Liffe Change
Jly $1.6325 +2.10c $1.6325-$1.6450 Jly $1,659 +$16
Sep $1.6565 +2.10c $1.6210-$1.6700 Sep $1,721 +$16
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