NEW YORK (Dow Jones)--Coffee prices inched lower Wednesday as the market digested recent bullish action.
Nearby coffee for July delivery ended 0.65 cents, or 0.4%, at $1.6260 a pound on ICE Futures U.S. The most-actively traded September contract settled 0.75 cent, or 0.5%, lower at $1.6490 a pound.
Coffee prices have risen nearly 19% since June 10 as supplies of high-quality arabica beans are difficult to find. Those beans, from Colombia and Central America, are costly after poor weather reduced output there in the last two seasons. The next harvest begins in late fall.
At the same time, 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.
Analysts said there is little pressure from bean sales at coffee origins. At the same time, speculators, like hedge funds and banks, are holding on to their bullish positions.
"I see nothing but technical consolidation in what is really a bull market," said Luis Rangel, vice president for commodities derivatives at ICAP Futures in Jersey City, N.J.
The September contract needs to move lower than $1.55 or above $1.70 to attract more trading activity, said Rodrigo Costa, vice president of institutional sales at Newdege USA in New York.
A potential bull flag pattern is developing on the daily and weekly chart, which could propel the coffee contract sharply higher over the next several weeks, a technical analyst says.
ICE coffee warehouse stocks decreased by 4,125 60-kilogram bags Wednesday to total 2.162 million bags, according to exchange data.
ICE coffee open interest --the number of active positions left at the end of the session-- increased by 1,816 lots Tuesday to total 171,872 lots, according to exchange data.
Volume was estimated at 10,697 lots, according to exchange data. In options, approximately 5,630 calls and 2,961 put options traded.
ICE Change Range Liffe Change
Jly $1.6260 -0.65c $1.6260-$1.6300 Jly $1,709 +$13
Sep $1.6490 -0.75c $1.6400-$1.6655 Sep $1,731 +$10
Nearby coffee for July delivery ended 0.65 cents, or 0.4%, at $1.6260 a pound on ICE Futures U.S. The most-actively traded September contract settled 0.75 cent, or 0.5%, lower at $1.6490 a pound.
Coffee prices have risen nearly 19% since June 10 as supplies of high-quality arabica beans are difficult to find. Those beans, from Colombia and Central America, are costly after poor weather reduced output there in the last two seasons. The next harvest begins in late fall.
At the same time, 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.
Analysts said there is little pressure from bean sales at coffee origins. At the same time, speculators, like hedge funds and banks, are holding on to their bullish positions.
"I see nothing but technical consolidation in what is really a bull market," said Luis Rangel, vice president for commodities derivatives at ICAP Futures in Jersey City, N.J.
The September contract needs to move lower than $1.55 or above $1.70 to attract more trading activity, said Rodrigo Costa, vice president of institutional sales at Newdege USA in New York.
A potential bull flag pattern is developing on the daily and weekly chart, which could propel the coffee contract sharply higher over the next several weeks, a technical analyst says.
ICE coffee warehouse stocks decreased by 4,125 60-kilogram bags Wednesday to total 2.162 million bags, according to exchange data.
ICE coffee open interest --the number of active positions left at the end of the session-- increased by 1,816 lots Tuesday to total 171,872 lots, according to exchange data.
Volume was estimated at 10,697 lots, according to exchange data. In options, approximately 5,630 calls and 2,961 put options traded.
ICE Change Range Liffe Change
Jly $1.6260 -0.65c $1.6260-$1.6300 Jly $1,709 +$13
Sep $1.6490 -0.75c $1.6400-$1.6655 Sep $1,731 +$10
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