Arabica coffee futures prices eased on Monday, pressured by light producer selling at the top of the intrude trading range and follow-through profit taking from last week's rally, market sources said.
The New York Board of Trade's active July arabica coffee contract finished down 0.55 cent to settle at $1.1385 a lb, after trading from $1.1325 to $1.1520. The September contract lost 0.50 cent to $1.1655 and longer-dated arabicas slid 0.35 to 0.45 cents.
"There was some light profit taking and a little Brazilian selling around in the market," a coffee trader said, speaking from a commodity brokerage.
"There was no damage done today." Last week, the benchmark July position peaked at $1.1640 a lb., its loftiest price since March 6 and up 9 percent from this year's bottom trade of $1.0625 on March 22. Traders said the bulls were reluctant to get too long before top coffee grower Brazil's arabica harvest kicks in. "The origin selling is going to be there on a scale-up basis, but I don't think it's much of a reason to have the market come off here," said a coffee trader at an investment bank. "But if we don't get a pop in the next few days then maybe they (producers) will start getting anxious because they don't want to sell at the $1.0625 low we had a few weeks ago," he said. Robusta harvesting has just started in Brazil and arabicas will start to be picked at the end of May.
Brazil's 2006/07 crop, mostly arabica beans, is officially forecast at 40.62 million 60-kg bags, up 23 percent from the previous season. Globally, coffee production for the 2006/07 year is expected to be near a balance with world consumption, according to recent estimates by the International Coffee Organisation.
On the price charts, traders put key support in the NYBOT's July coffee contract at $1.1150, and then $1.10, with resistance at $1.1640, and then $1.1770. Estimated coffee futures trading volume hit 8,927 contracts, down from the official count of 13,840 lots the previous session. In London, the Life's July robusta contract rose 1.08 percent to settle at $1,214 a tonne.
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