sábado, 17 de julho de 2010

16/07: Near Steady On Chart, Commodity Selling


DOW JONES NEWSWIRES

Arabica coffee futures for September delivery closed near steady Friday after chart-based selling countered an early run to near three-week highs.

Most active September coffee lost 0.05 cent, or 0.03%, to settle at $1.6705 a pound on ICE Futures U.S. in New York.

While most of the activity in coffee was attributed to chart influences, pressure also stemmed from a weak commodity complex and more than 2% losses on Wall Street.

A report from the University of Michigan showing U.S. consumer sentiment tumbled to levels not seen since March 2009 cast a bearish pall over the markets. The report was the latest in a string of weaker-than-expected economic data that cast doubt on the recovery.

Traders sold commodities to limit riskier investments amid the shaky economic climate.

September coffee earlier in the session climbed to a high of $1.6980 on light speculative buying, where it tangled with chart resistance and slipped.

"We ran into selling pressure as prices neared $1.70, and even though we've been higher here, the upside momentum is dying out," said Boyd Cruel, senior softs market analyst at Vision Financial Markets in Chicago.

Coffee futures have been holding higher ground, in a range of about $1.60-$1.70, but recent rally attempts have been thwarted amid a lack of aggressive fund participation, a broker said.

Coffee continues to find underlying fundamental support from extremely tight supplies of top-quality arabica beans in Central America and Colombia, after adverse weather crimped output. This influence has allowed coffee futures to retain higher levels in recent sessions.

September coffee sees nearby chart resistance at $1.70, with support pegged at $1.55 a pound. A rally above $1.70 would encourage further gains while a break below $1.55 would have bears targeting $1.50, then $1.45 a pound.

Despite expectations for a bumper 2010-11 crop from top grower Brazil, beans are trickling in from the early harvest. Supplies are expected to remain tight in the near term and provide continued support for physical prices, traders said.

Much-needed supplies of the top-quality arabica beans from Colombia and Central America won't be available until the fall.

Total open interest on ICE rose 1,668 to total 174,038 lots. Just 139 positions remained open in nearby July ahead of its expiration on Tuesday.

Futures volume is pegged at 12,476 contracts, with 2,662 calls and 4,867 put options traded.

ICE Change (cents) Range
July $1.6480 unch $1.6465-$1.6500
Sep $1.6705 dn 0.05 $1.6505-$1.6980

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