DOW JONES NEWSWIRES
Arabica coffee futures for September delivery fell Monday on chart-based selling and weak outside markets.
Most active September coffee lost 3.25 cents, or 2%, to settle at $1.6380 a pound on ICE Futures U.S. in New York.
Much of the selling was chart related after September coffee had neared resistance at $1.70 a pound last week and eased. Monday's trade was a continuation of that weak technical trend.
"We were unable to get above $1.70, so people got a little cautious and began liquidating some positions," said Rodrigo Costa, vice president of institutional sales at Newedge in New York.
September coffee fell to a session and one-week low of $1.6125 before buying interest surfaced and traders bought back previously sold positions. This allowed prices to close off of their weakest levels of the day.
Outside influences were also a factor as weak commodity indexes and a choppy trade in equities provided selling pressure.
A weaker-than-expected report on U.S. housing Monday morning rattled investors. The National Association of Home Builders' gauge of confidence in new-home sales fell to 14 in July, the lowest since April 2009. Traders had expected the index to fall only slightly to 16, from a previously reported 17 in June.
The report encouraged some traders to sell commodities to reduce their exposure to riskier bets.
While the market saw increased hedging pressure last week from the ongoing Brazilian harvest, that influence was negligible Monday, a broker said.
Producers have harvested from 40%-50% of Brazil's arabica crop so far, said Costa.
Top-quality arabica supplies remain tight, however, as adverse weather led to short crops in Colombia and Central America. While those countries crops are expected to rebound this year, the harvest won't begin in earnest until the fall.
The tight supply situation continues to provide underlying support for coffee futures, said Costa.
Coffee exports from Mexico fell 33% in June from the year-ago level to 195,222 60-kilogram bags, the government said. the export cycle runs from October through September of the following year.
Total open interest on ICE rose 867 to total 174,905 lots. Just 39 positions remained open in nearby July ahead of its expiration on Tuesday.
Futures volume is pegged at 16,646 contracts, with 2,526 calls and 4,351 put options traded.
ICE Change (cents) Range
July $1.6200 dn 2.80 $1.6175-$1.6465
Sep $1.6380 dn 3.25 $1.6125-$1.6690
Arabica coffee futures for September delivery fell Monday on chart-based selling and weak outside markets.
Most active September coffee lost 3.25 cents, or 2%, to settle at $1.6380 a pound on ICE Futures U.S. in New York.
Much of the selling was chart related after September coffee had neared resistance at $1.70 a pound last week and eased. Monday's trade was a continuation of that weak technical trend.
"We were unable to get above $1.70, so people got a little cautious and began liquidating some positions," said Rodrigo Costa, vice president of institutional sales at Newedge in New York.
September coffee fell to a session and one-week low of $1.6125 before buying interest surfaced and traders bought back previously sold positions. This allowed prices to close off of their weakest levels of the day.
Outside influences were also a factor as weak commodity indexes and a choppy trade in equities provided selling pressure.
A weaker-than-expected report on U.S. housing Monday morning rattled investors. The National Association of Home Builders' gauge of confidence in new-home sales fell to 14 in July, the lowest since April 2009. Traders had expected the index to fall only slightly to 16, from a previously reported 17 in June.
The report encouraged some traders to sell commodities to reduce their exposure to riskier bets.
While the market saw increased hedging pressure last week from the ongoing Brazilian harvest, that influence was negligible Monday, a broker said.
Producers have harvested from 40%-50% of Brazil's arabica crop so far, said Costa.
Top-quality arabica supplies remain tight, however, as adverse weather led to short crops in Colombia and Central America. While those countries crops are expected to rebound this year, the harvest won't begin in earnest until the fall.
The tight supply situation continues to provide underlying support for coffee futures, said Costa.
Coffee exports from Mexico fell 33% in June from the year-ago level to 195,222 60-kilogram bags, the government said. the export cycle runs from October through September of the following year.
Total open interest on ICE rose 867 to total 174,905 lots. Just 39 positions remained open in nearby July ahead of its expiration on Tuesday.
Futures volume is pegged at 16,646 contracts, with 2,526 calls and 4,351 put options traded.
ICE Change (cents) Range
July $1.6200 dn 2.80 $1.6175-$1.6465
Sep $1.6380 dn 3.25 $1.6125-$1.6690
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