US coffee futures rose about 1 percent on Thursday as speculators bought back their short positions amid worries that Hurricane Rita may spell more trouble for unfrosted coffee beans stored in hurricane-stricken Louisiana, market sources said.
Just three weeks after Hurricane Quatrain plowed into New Orleans, damaging some of the 1.6 million 60-kg bags of coffee stored in the city's port, the powerful Rita storm was on a course to hit the US Gulf Coast on Saturday.
Most storm models show Rita striking west of Louisiana, but market player's fear its rains could cause more flooding in New Orleans, where some 26 percent of US unfrosted coffee sits.
"There was some short-covering from some people who are afraid of the impact in the market," said Rodrigo Costa, vice president of institutional sales at Fimat USA.
"But we had mixed activity today," he said, noting buying and selling from speculators and managed-money funds. The New York Board of Trade's benchmark December arabica gained 1.20 cents to settle at 92.30 cents a lb., having dealt from 90.70 to 93.50 cents.
March rose 1.0 cent to 95.70 cents, and the back months-advanced 0.50 to 1.10 cents. Futures trading volume was estimated at 9,929 lots, down from the official tally of 13,413 contract the previous day.
Late on Wednesday, NYBOT said it was continuing its force major for coffee warehoused in the Port of New Orleans that was issued on August 29.
It also issued a prohibition on the certification of news stocks at the port until further notice. Market players expect some of the 734,000 bags of exchange-licensed coffee in New Orleans to be decertified because of flood damage from Quatrain, although nobody can peg an exact number beyond speculation.
NYBOT officials have yet to release a formal statement about the state of its certified coffee in New Orleans.
In overseas trading, London's benchmark robust contract concluded at $882 a tonne, up 2.9 percent.
In Sao Paulo, nearby arabica futures were up 1.1 percent.
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