30/07: Soars To Fresh 12-Year High As Funds Buy

NEW YORK (Dow Jones)--Coffee prices soared to fresh 12-year highs Friday, driven by speculative fund buying.

Nearby coffee for September delivery ended 3.25 cents, or 2%, higher at $1.7630 a pound on ICE Futures U.S., it's strongest settlement since February 1998.

Coffee prices have risen 6.5% this week. This is the latest leg of a 17% rally that took off in mid-June. Two years of poor weather have hampered production of high-quality arabica beans in Colombia and Central America, the leading sources of that premium coffee. Those beans won't be available until late fall, when harvests begin there.

In the meantime, supplies from Brazil, the world's top coffee producer, have helped fill the gap, but now producers there are holding onto supplies on hopes that prices will climb. Brazilian green coffee exports rose to 1.64 million bags in July, up from 1.47 million in June, according to the Brazilian Green Coffee Exporters Council, or Cecafe. Coffee trade in Brazil saw a lift from the New York rally but activity remained light in the last week, as much of the early crop has been sold and as producers await higher prices, traders there said.

Coffee and most commodity prices got a boost Friday as the weaker dollar sustained speculative interest in commodities. Contracts are less costly in other currencies when the greenback is down. Lower-than-expected U.S. economic growth sparked dollar weakness during the session.

"The market jumped because of very good buying from funds and specs," said Hernando de la Roche, managing director of coffee trading at Hencorp Becstone Futures in Miami.

Coffee futures trading has been volatile in recent weeks as fund traders look to technical charts and macroeconomic cues for direction, as well as coffee's bullish fundamental picture.

Prices are likely to trade within a range of $1.57 to $1.77 in the near term, said Sterling Smith, market analyst with Country Hedging in St. Paul, Minn.

Prices for robusta coffee on NYSE Liffe hit a two-year high Friday. Liffe September coffee settled $63, or 4%, higher at $1,810 a metric ton. Fund buying on top of declining stocks supported that market similarly, analysts there said.

ICE coffee open interest--the number of active positions left at the end of the session--increased by 2,492 lots Thursday to total 169,979 lots, according to exchange data.

Volume was estimated at 28,236 lots, according to exchange data. In options, approximately 10,009 calls and 7,643 put options traded on the floor.

ICE Change Range
Sep $1.7630 +3.25c $1.7265-$1.7875
Dec $1.7680 +3.05c $1.7320-$1.7935

13/07: Rises As Tight Supplies Attract Buying

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

12/07: Edges Lower In Thin Trade

Arabica coffee futures for September delivery closed with minor losses on Monday, pressured by a weak trade in the commodity indexes and a firm U.S. dollar.

Most active September coffee traded on ICE Futures U.S. lost 0.30 cent, or 0.18%, to settle at $1.6355 a pound. Thinly traded July lost 0.05 cent, or 0.03%, to end at $1.6115.

Coffee futures were held to recent ranges--pressured by key outside markets--as prices continue to consolidate after the late June rally to 12-year highs.

"In the short term, we had that big, strong rally and we're just kind of settling out...and then we may see another leg up," said Jimmy Tintle, a broker/analyst with TransWorld Futures in Tampa, Fla.

Continued tight nearby supplies of high-quality arabica beans could have bullish traders targeting $1.8490 on September coffee, he said.

However, the harvest pace out of top-grower Brazil is picking up momentum as large quantities of cherries ripen on the bushels, local agricultural consultancy Safras & Mercado said Monday.

The arabica harvest reached 45% complete as of July 7, up from 40% the previous week and 40% in the comparable year-ago period. Coffee farmers are rushing the beans to market to take advantage of high prices.

Tight supplies out of Colombia, the world's largest grower of top-quality arabica beans, continues to provide support for coffee futures.

Safras estimates the cyclically large Brazilian crop at 54.6 million bags, of which 41.5 million are arabica.

The International Coffee Organization said last week it expects Brazil's2010-11 coffee crop to reach 50 million bags.

Large fund traders continued to increase their net-long exposure to the market, meaning they expect prices to rise.

Funds increased their net-long position in coffee to 34,511 contracts in the week through July 6, from 32,979 the previous week, the disaggregated Commitments of Traders report showed.

Funds are 14.9% net long, versus 14% the week prior.

Total open interest on ICE rose 700 to total 168,441 lots.

Futures volume is pegged at 11,845 contracts, with 4,485 calls and 4,065 put options traded.

ICE Change (cents) Range
Jul $1.6115 dn 0.05 $1.5965-$1.6115
Sep $1.6355 dn 0.30 $1.5900-$1.6440

09/07: DJ ICE Coffee Review: Modest Gains; Traders Take Profits

DOW JONES NEWSWIRES

Arabica coffee futures for September delivery closed with modest gains--off session peaks--as traders took profits ahead of the weekend.

Most active September coffee on ICE Futures U.S. added 1.75 cent, or 1.1%, to settle at $1.6385 a pound, off the session high of $1.6720.

Thinly traded July, which expires on July 20, rose 1.55 cents, or 0.97%, to end at $1.6120 a pound.

Coffee futures have traded in a range from $1.57 up to $1.70 in recent sessions, as the market consolidates after touching a 12-year high of $1.7650 on June 24. Extremely tight supplies of top-quality arabica beans combined with unfounded cold weather concerns in Brazil and heavy fund buying helped futures to their highs. The market continues to hold at strong levels despite fair weather in top grower Brazil and expectations for the country to produce a large crop of 50 million bags.

Firm equity markets helped the commodity sector get off to a strong start Friday morning, as rebounding stock markets indicate a pickup in economic activity, a trader said.

The Dow Jones Industrial Average has gained about 5.8% this week after diving last Friday to its lowest point since October 2009.

"We're wrapping up a strong week in the equity markets, though coffee has been trading rather independently," said Spencer Patton, analyst and chief investment officer at Steel Vine Investments in Chicago.

Coffee futures also found support on declining world exports.

Cumulative exports from October 2009 to May 2010 fell 8.1% to 61 million 60-kilogram bags, from 66.3 million the previous year, the International Coffee Organization said Thursday.

World coffee production in 2010-11 is estimated between 133 million and 135 million tons, the ICO said, maintaining its June projection.

Output from Colombia--the world's largest grower of mild, washed arabica beans--for 2010-11 is expected to hit 10 million to 11 million bags, up 2.2 million to 2.7 million bags from 2009, according to the ICO.

Supplies may remain tight for some time yet, however, as consumption increases.

Global consumption is expected to have grown by 2 million bags to 132 million in 2009, the ICO said, as a slowdown in some traditional consuming countries was tempered by growth in developing nations.

Patton said coffee may be forming a potentially bearish head-and-shoulders pattern, which could indicate a top in the market.

A close below $1.5685 in September coffee would verify the pattern, while a close above $1.71 would invalidate it, he said.

Options on August coffee expired Friday, which also pressured the market as traders gravitated toward the $1.60 strike price, the trader said.

Coffee futures also find support from a continued, significant drawdown in warehouse supplies. ICE warehouse stocks on Friday fell 6,287 bags to total 2.173 million bags, down about 31% from December 2009 levels, the exchange reported.

Total open interest on ICE fell 159 to total 167,741 lots. Just 83 contracts remained open in nearby July.

Futures volume is pegged at 16,575 contracts, with 6,333 calls and 2,889 put options traded.

ICE Change (cents) Range
July $1.6120 up 1.55 $1.6120-$1.6205
Sep $1.6385 up 1.75 $1.6205-$1.6720

08/07: Coffee Futures Fall as Brazil's Crop May Escape Frost Damage

Arabica-coffee futures fell for the third time in four sessions after a weather forecaster said Brazil’s crop, the world’s largest, should be undamaged by frost this month. Cocoa also declined.

The prospect of freezing weather in the South American country sent coffee prices to a 12-year high in New York last month. The risk was lowered yesterday when Sao Paulo-based forecaster Somar Meteorologia predicted that Brazil’s main producing area probably will be frost-free through July.

“There were a lot of jitters off of the fact that some cold weather moved into the area earlier than usual,” said Tom Mikulski, a senior market strategist at Lind-Waldock, a broker in Chicago. “With no weather premium and the harvest moving along as scheduled, it’s hard not to be a little bearish right now.”

Arabica coffee for September delivery fell 0.95 cent, or 0.6 percent, to $1.621 a pound on ICE Futures U.S. in New York. Prices have jumped 19 percent this year.

Global coffee output will probably be 133 million to 135 million bags in the year that begins Oct. 1, the International Coffee Organization said today in an e-mailed report from London. That’s up at least 10 percent from the 120.6 million bags estimated for the current year.

Bigger Crops?

“There are indications that production levels are gradually increasing,” Nestor Osorio, ICO’s executive director, said in the report. “A return to normal production levels in a number of producing countries could contribute to the application of corrections as supplies of new crop arrive on the market.”

Brazil’s production may total about 50 million bags, the trade group said. A bag of coffee weighs 60 kilograms (132 pounds).

“Once the harvest is done, you’re going to see a large influx of coffee into the market,” Mikulski said. “If production numbers hold up, I don’t see any reason how this market could hang onto these levels.”

Cocoa futures for September delivery fell $12, or 0.4 percent, to $2,969 a metric ton in New York. Prices have gained 17 percent in the past year.

17/06: Falls In Correction; Traders Uncertain

DJ ICE Coffee Review: Falls In Correction; Traders Uncertain NEW YORK (Dow Jones)--Coffee prices slipped for the first time in eight sessions Thursday as traders paused to plot their next moves in the wake of a 17.5% rally.

Nearby coffee for July delivery ended 2.40 cents, or 1.5%, lower at $1.5635 a pound on ICE Futures U.S.

Coffee prices hit their highest levels in more than two years Tuesday. The initial jolt was sparked by commercial short covering, or buying to exit the obligation to sell coffee. Those gains attracted speculative fund buyers, like banks and hedge funds, who were following bullish technical cues. Prior to this rally, the coffee market had traded sideways between $1.30-$1.40 since January. Prices have found support from extremely low availability of high-quality arabica beans after two years of poor harvests in Central America and Colombia. But expectations of a bumper crop from Brazil, the world's top coffee producer, have kept a lid on coffee prices.

Traders stepped back from the excitement to assess the situation. Analysts said Brazilian coffee producers are likely to sell if they see the rally is wearing down. Those sales would signal to funds that more losses are in store, activating more sales.

"The more that we see this consolidating pattern, the more likely we are to see this coffee market come back to earth," a Chicago-based broker and analyst said.

However, after the surprise rally, there's no telling the next move for the coffee market.

"It's still anybody's guess as the where the market could go if funds continue to buy," said Marcio Bernardo, a coffee broker and analyst at Newedge US in New York. "If funds buy another 20,000 [or] 30,000 lots, they can take this thing up another 10 or 20 cents."

Tightness in the cash coffee market has underpinned prices for more than a year. Traders are paying close attention to the pace of harvest in Brazil. Though nearly half of the country's crop is arabica beans, traders estimate only 10% of those are of high enough quality to parallel the beans from Central America and Colombia. Harvests in those countries occur during the fall.

In the near term, the coffee market is due for a correction back to $1.50, which presents a good buying opportunity, a coffee trader in Central America said.

The trader noted Brazil's June coffee exports are dow compared to last month, an indication that shipments may not pick up as expected.

Brazil's green coffee exports totaled 511,858 60-kilogram bags in the week to June 16, compared with 1.027 million bags for the same period in May, according to the country's Green Coffee Exporters Council, or Cecafe.

Bernardo noted that trade was somewhat light earlier in the month, so end-of-the-month figures will be more representative of trade.

ICE coffee warehouse stocks decreased by 1,695 60-kilogram bags Thursday to total 2.25 million bags, according to exchange data.

ICE coffee open interest--the number of active positions left at the end of the session--increased by 2,163 lots Wednesday to total 153,380 lots, according to exchange data.

Volume was estimated at 35,314 lots, according to exchange data. In options, approximately 4,574 calls and 4,862 put options traded.

ICE Change Range Liffe Change
Jly $1.5635 -2.40c $1.5540-$1.5970 $1,540 -$23
Sep $1.5780 +210 pts $1.5665-$1.6090 $1,551 -$15


-By Holly Henschen, Dow Jones Newswires; 212-416-2138 begin_of_the_skype_highlighting 212-416-2138 end_of_the_skype_highlighting;
holly.henschen@dowjones.com

09/06: Floats Higher On Bullish Fund Sentiment

Coffee prices rose Wednesday on a wave of buying across commodities and equities activated by bullish economic outlooks from China and the U.S.

Nearby coffee for July delivery ended 0.90 cent, or 0.7%, higher at $1.3445 a pound on ICE Futures U.S.

Coffee prices have been trapped in a tight range for much of 2010 with little definitive change to the market's fundamental outlook. High-quality washed arabica coffees are hard to find after two consecutive seasons of poor harvests in Colombia and Central America. However, expectations for a Brazilian bumper crop, which is just gearing up, have kept a lid on the market as those varieties are expected to tide roasters over until the fall harvest in other countries.

Global markets received an invigorating jolt Wednesday from Reuters reports that China's May exports rose 50% from the same time last year. Speculative fund buyers, like banks and hedge funds, poured back into risky markets after months of paring exposure and flight to the safe-haven dollar. China is a barometer of world economic conditions due to its role as a major importer of raw materials and export of manufactured goods. Those strong exports are assumed to be feeding world demand, which some had worried was curtailed. On the same token, bullish economic outlooks for the U.S. from Federal Reserve Chairman Ben Bernanke also boosted investor sentiment.

Coffee plays into this picture as fund buying supported commodities, particularly amid the weaker dollar, which makes those contracts less expensive in other currencies.

"In the short term, it's all related to the U.S. dollar," said Marcio Bernardo, a coffee broker and analyst at Newedge USA in New York. "Everything is going to be dictated by the flow of money from the funds." Amid expectations for a sizable crop from Brazil, weather or quality issues there could support the market if they arise, he noted.

Brazil's 2010 coffee crop is expected to be 45.8 million 60-kilogram bags, the agricultural survey group of Brazil's Census Bureau, the IBGE, said Tuesday. Brazil's May green coffee exports totaled 2.21 million 60-kilogram bags, down from 2.26 million bags a year ago, according to figures Tuesday from the Brazilian Green Coffee Exporters Council, or Cecafe. Brazil, the world's No. 1 coffee exporter, in May exported 2.086 million bags of green arabica coffee and 128,041 bags of conillon coffee, Cecafe said.

Drastic weakness in the U.S. dollar could push September coffee prices higher near the $1.38 level in the near term, said Tom Mikulkski, a senior market strategist at Lind-Waldock in Chicago.

ICE coffee warehouse stocks decreased by 935 60-kilogram bags Wednesday to total 2.287 million bags, according to exchange data.

ICE coffee open interest--the number of active positions left at the end of the session--increased by 1,577 lots Tuesday to total 139,955 lots, according to exchange data.

Volume was estimated at 41,252 lots, according to exchange data. In options, approximately 6,292 calls and 1,955 put options traded.

ICE Change Range Liffe Change
Jly $1.3445 +0.90c $1.3325-$1.3465 Jly $1,383 +$42
Sep $1.3605 +1.22c $1.3475-$1.3620 Sep $1,407 +$32

07/06: Slips As Brazil Frost Fears Lighten

Coffee prices slipped Monday as traders sold on expectations Brazil's coffee plantations would emerge unscathed from a recent cold spell.

Nearby coffee for July delivery ended 0.65 cent, or 0.5%, lower at $1.3310 a pound on ICE Futures U.S.

Coffee futures have been trending lower since hitting two-week highs on June 1. Traders bought to avoid risk in light of cold temperatures in Brazil--the world's leading coffee producer and exporter. Frost can damage the trees the coffee grows on.

"The market now is shedding a bit of weather premium," said Luis Rangel, vice president of commodities derivatives at ICAP North America in Jersey City, N.J.

Cold temperatures are not likely to damage Brazil's coffee trees in the near term, according to Meteorlogix, a private forecaster. Temperatures are forecast to average near to below normal through the week in southern Minas Gerais and near to above normal elsewhere in the region, Meteorlogix said Monday.

Gains in coffee prices have been capped on expectations Brazil's coffee will produce a bumper crop. Traders anticipate Brazilian supplies, which are not deliverable against ICE coffee contracts, will help plug the gap from a shortage of high-quality beans. These washed arabicas, which originate in Central America, Mexico and Colombia, are in short supply following a pair of
poor harvests due to unfavorable weather conditions. Coffee merchants use ICE Futures prices as a baseline for discounts or premiums to cash coffee transactions.

Coffee futures posted losses Monday against a backdrop of unsteady macroeconomic cues as uncertainty regarding Hungary's debt stokes contagion fears in the euro-zone area. Though Hungary does not officially use the common currency, the traders continue to flee from the euro to the dollar. A stronger dollar makes commodities more costly in foreign currencies.

Spread trading dominated volume ahead of Friday's July options expiration, Rangel noted. Previous options expirations have weighed on coffee, and the market could target the $1.30 area, he noted. That level is a strong support point for July, as most-active coffee futures have held above that level since mid April.

ICE coffee warehouse stocks decreased by 2,975 60-kilogram bags Monday to total 2.3 million bags, according to exchange data.

ICE coffee open interest--the number of active positions left at the end of the session--increased by 1,084 lots Friday to total 138,232 lots, according to exchange data.

Volume was estimated at 31,256 lots, according to exchange data. In options, approximately 6,612 calls and 1,746 put options traded.

ICE Change Range
Jly $1.3310 -0.65c $1.3255-$1.3365
Sep $1.3460 -0.70c $1.3400-$1.3520

04/06: Falls With Commodities

Coffee prices tumbled to one-week lows Friday as broad-based commodities sales followed disappointing U.S. employment data that multiplied bearishness on euro-zone debt.

Nearby coffee for July delivery ended 1.85 cent, or 1%, lower at $1.3375 a pound on ICE Futures U.S. The contract lost 0.4% this week.

Coffee prices have trended higher for much of the last two weeks as cold temperatures put growing regions in Brazil--the world's top producer and exporter--at risk for frost damage. Though no frost is in the forecast, weather premium has entered the market as traders take protection against a possible cut in the bumper crop expected from Brazil this season. Meteorologists expect cold conditions are to persist through mid-June.

Commodities including crude, metals and Chicago Board of Trade grains fell as the dollar sky-rocketed against the ailing euro. A strong dollar makes commodities more expensive in other currencies. The dollar rallied as the euro dropped on continued sovereign-debt concerns. At the same time, May U.S. payrolls data showed weaker-than-expected numbers, diminishing bullishness about the country's economic progress. Investors took the combination of news to mean the U.S. wouldn't be able to offset macroeconomic weakness in Europe.

Along with outside pressure, traders also sold coffee to book profits Thursday as futures failed to push through the $1.38 level during the week, said Hernando de la Roche, managing director of Hencorp Becstone Futures in Miami.

Coffee has occupied a tight $1.30-$1.40 range for most of 2010. The market has support from tight available cash supplies of high-quality washed coffee. At the same time, Brazil's biennially larger crop is expected to provide a buffer until the Latin American arabica harvest later this year.

De la Roche said July coffee futures have support at the $1.31 level.

ICE coffee open interest increased by 916 lots Thursday to total 137,148 lots, according to exchange data.

Volume was estimated at 33,207 lots, according to exchange data. In options, approximately 6,474 calls and 5,593 put options traded on the floor.

       ICE       Change     Range
Jly   $1.3375   -1.85c   $1.3340-$1.3615
Oct   $1.3530   -1.75c   $1.3495-$1.3765


-By Holly Henschen, Dow Jones Newswires; 212-416-2138 begin_of_the_skype_highlighting              212-416-2138      end_of_the_skype_highlighting;
holly.henschen@dowjones.com


(END) Dow Jones Newswires

Coffee Review: Falls; Traders Sell On EU Debt Worries

Arabica coffee for July delivery fell Friday, under the pressure of a
rallying U.S. dollar and weak equities market, as traders shed riskier
commodity investments on concern that the Greek debt crisis could spread.

Most active July coffee lost 2.8 cents, or 2%, to end at $1.3430 a pound on
ICE Futures U.S. in New York. Nearby May, which expires Tuesday, fell 2.8
cents, or 2%, to settle at $1.3425.

For the week through Friday, July coffee was essentially unchanged, edging up
0.40 cent, or 0.29%, compared to last Friday's settlement.

Commodity markets withered amid fear that the Greek debt crisis could spill
into other euro-zone nations like Spain and Portugal, sending traders to the
relative safety of the dollar. Speculative fund traders sold commodities in an
attempt to shave riskier bets from their portfolios, brokers said.

"Seeing the dollar rally is not giving the market confidence that coffee can
work higher," said Hernando de la Roche, managing director of coffee trading at
Hencorp Futures in Miami.

In addition to the bearish outside market influence, coffee futures were
pressured by origin selling as top grower Brazil harvests its crop, he said.

The Brazilian harvest is just 10% complete, however, and the vast amounts of
beans won't begin hitting the market for a week or two, depending on the
weather, a trader said.

While Brazil's main coffee-growing regions have seen a cold spell this week,
there's no immediate threat of frost, local weather service Somar said Friday.
The crop still needs warm, dry conditions to bring the bulk of the crop to
maturity.

A widespread frost hasn't gripped Brazil in 10 years.

Despite Friday's wide 4.8-cent trading range, July futures remain locked in a
larger range from $1.30 to $1.40 a pound.

Bullish technical traders this week attempted to take out the May 4 high of
$1.3870 but failed. The inability to pierce this resistance area is a bearish
technical signal and is encouraging chart-based traders to sell, said de la
Roche.

ICE warehouse stocks fell 5,630 bags to total 2.369 million bags, according
to the exchange.

Open interest--the number of contracts outstanding between traders at the
prior day's close--fell 909 contracts to total 135,241 contracts, ICE reported.
Just 30 positions remained open in May ahead of its expiration next week.

Futures volume is pegged at 26,334 lots traded, with 6,069 calls and 4,221
put options traded.


   ICE       Change     Range
May   $1.3425   dn 2.8c   $1.3325-$1.3670
July  $1.3430   dn 2.8c   $1.3310-$1.3790

13/05: Edges Higher But Holds Within Range

Arabica coffee for July delivery edged higher at Thursday's close, though prices remain confined to Wednesday's trading range in subdued dealings.

While the gains were marginal, July coffee continues to consolidate near the recent highs, a positive sign for bulls, a trader said.

Most-active July coffee traded on ICE Futures U.S. in New York added 0.25 cent, or 0.18%, to end at $1.3710 a pound. Nearby May, which expires on Tuesday, rose 0.25 cent, or 0.18%, to settle at $1.3705.

"Coffee's consolidating near the highs, even though the dollar is stronger, which would normally be bearish, but the market's managing to hold up well," said Rodrigo Costa, vice president of institutional sales at Newedge in New York.

A lack of top-quality arabica coffee in the physical market, due to erratic growing weather in Central and South America, continues to underpin futures, he said.

Traders are expecting a fairly large Brazilian crop, though industry estimates have ranged widely from a low of 47 million bags all the way up to 60 million bags, the harvest of which has just begun. Traders are also concerned about the quality of the beans. Warm, dry conditions are needed to finish out the crop, growers have said.

Last year's Brazilian crop totaled 39.5 million bags, which was smaller due to the cyclical nature of the trees.

Technically, July still needs to close above $1.3870 to encourage additional fund buying, Rodrigo said. The contract finds chart support at $1.3500 and again at $1.3300 a pound. The May 7 low of $1.3125 offers further support.

ICE warehouse stocks fell 5,484 bags to total 2.37 million bags, according to the exchange.

Open interest--the number of contracts outstanding between traders at the prior day's close--fell 493 contracts to total 136,150 contracts, ICE reported. Just 31 positions remained open in May ahead of its expiration next week.

Futures volume is pegged at 11,557 lots traded, with 4,489 calls and 1,696
put options traded.

   ICE       Change     Range
May  $1.3705   up 0.25c  $1.3705-$1.3740
Jly  $1.3710   up 0.25c  $1.3650-$1.3795

11/05: DJ ICE Coffee Review: Rises On Fund Buying, Bullish Charts

Arabica coffee for July delivery rose Tuesday, supported by speculative buying linked to fund interest in commodities and boosted further by bullish chart indicators that attracted technical buying.

Most active July coffee climbed 2 cents, or 1.5%, to settle at $1.3615 a pound, near the session peak of $1.3685. Nearby May added 1.7 cents, or 1.3%, to end at $1.3525 a pound.

ICE coffee has posted three consecutive higher closes, all but erasing Thursday's dramatic decline that was linked to a rallying dollar and worries over the potential spread of the Greek debt crisis. A EUR750 billion aid package, backed by the European Union and the International Monetary Fund, helped restore investor confidence and traders began to buy commodities again,
thus boosting coffee, brokers said.

In addition, worries about South American coffee crops, particularly in Colombia, were supportive for futures. The International Coffee Organization maintained its 2009-10 global coffee output at 122 million bags, though it continues to monitor climate changes that could affect the volume and quality of the crops, said Nestor Osorio, ICO executive director.

Erratic weather in South America caused by El Nino has been followed by a "reverse La Nina phenomenon," he explained, which may cause abnormal cooling.

"Climatic problems in some exporting nations don't appear to have diminished, he said Tuesday.

Coffee exports in the first six months of the current 2009-10 crop year totaled 44.7 million bags, down 9.6% from the same period the previous crop year.

Colombian production in the first six months of the year was downwardly revised to 4.5 million bags, a sharp decline from an original forecast of 5.2 million, Colombia's National Federation of Coffee Growers, or Fedecafe, said Monday.

ICE coffee also attracted technical buying after prices pushed through chart-based resistance at Monday's high of $1.3485 and again near 40-day moving average resistance at $1.3500 a pound, said Hernando de la Roche, managing director of coffee trading at Hencorp Futures in Miami.

Pre-programmed buy orders were activated at these levels, spurring coffee's gains.

ICE warehouse stocks fell 6,638 bags to total 2.39 million bags, according to the exchange.

Open interest--the number of contracts outstanding between traders at theprior day's close--rose 845 contracts to total 137,301 contracts, ICE reported. Just 86 positions remained open in May ahead of its expiration on May 18.

Futures volume is pegged at 16,223 lots traded, with 4,035 calls and 2,093 put options traded.

    ICE       Change     Range
May  $1.3525   up 1.7c  $1.3405-$1.3650
Jly  $1.3615   up 2.0c  $1.3360-$1.3685