Arabica coffee prices drifted higher in range-bound trade Thursday.
Nearby coffee for September delivery ended 0.10 cent, or 0.60%, higher at $1.6985 a pound on ICE Futures U.S.
Supplies of high-quality arabica coffee beans are tight, and that situation supplied technical chart patterns that attract interest from speculative traders like banks and hedge funds. Two seasons of poor coffee harvest in Central America and Colombia--locations key to premium bean production--were quickly built into prices. Now the market is in a choppy holding pattern.
"We're trapped between producer selling at $1.80 and commercial support below $1.70," said Luis Rangel, vice president for commodities derivatives at ICAP Futures in Jersey City, N.J. "In the middle we're seeing a real lack of momentum and activity."
There is uncertainty about the amount of beans from Brazil, the world's top producer, that will be considered of high enough quality to meet roaster's standards. Beans from Colombia and Central America are typically of a higher standard than Brazil's.
Brazil's 2010-11 coffee crop is expected to be 45.8 million 60-kilogram bags, the agricultural survey group of Brazil's Census Bureau, the IBGE, said Thursday. Brazil, the world's No. 1 coffee producer, has a cyclically larger crop this year compared with last year. The harvest for arabica beans, the main export coffee, started in May and should run through September.
ICE coffee open interest--the number of active positions left at the end of the session-- decreased by 42 lots Wednesday to total 166,140 lots, according to exchange data.
Volume to the point of settlement was estimated at 23,671 lots, according to exchange data. In options, approximately 3,442 calls and 2,918 put options traded.
ICE Change Range
Sept $1.6985 +0.10c $1.6910-$1.7265
Dec $1.7105 +0.20c $1.7015-$1.7370
Nearby coffee for September delivery ended 0.10 cent, or 0.60%, higher at $1.6985 a pound on ICE Futures U.S.
Supplies of high-quality arabica coffee beans are tight, and that situation supplied technical chart patterns that attract interest from speculative traders like banks and hedge funds. Two seasons of poor coffee harvest in Central America and Colombia--locations key to premium bean production--were quickly built into prices. Now the market is in a choppy holding pattern.
"We're trapped between producer selling at $1.80 and commercial support below $1.70," said Luis Rangel, vice president for commodities derivatives at ICAP Futures in Jersey City, N.J. "In the middle we're seeing a real lack of momentum and activity."
There is uncertainty about the amount of beans from Brazil, the world's top producer, that will be considered of high enough quality to meet roaster's standards. Beans from Colombia and Central America are typically of a higher standard than Brazil's.
Brazil's 2010-11 coffee crop is expected to be 45.8 million 60-kilogram bags, the agricultural survey group of Brazil's Census Bureau, the IBGE, said Thursday. Brazil, the world's No. 1 coffee producer, has a cyclically larger crop this year compared with last year. The harvest for arabica beans, the main export coffee, started in May and should run through September.
ICE coffee open interest--the number of active positions left at the end of the session-- decreased by 42 lots Wednesday to total 166,140 lots, according to exchange data.
Volume to the point of settlement was estimated at 23,671 lots, according to exchange data. In options, approximately 3,442 calls and 2,918 put options traded.
ICE Change Range
Sept $1.6985 +0.10c $1.6910-$1.7265
Dec $1.7105 +0.20c $1.7015-$1.7370
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