Arabica benchmark coffee futures rallied on Monday to finish at an 11-day high on fund buying and light producer selling, traders said. "What we saw was pretty much a lack of origin selling and funds buying the market. With the Europe's strength, I think it's making commodities overall, priced in dollars, a little bit cheaper," one trader said.
The NYBOT March arabica coffee futures rose over 2 percent, ending up 2.50 cents at $1.2265 per lb, trading in a range from $1.2020 to $1.2285. The rest finished up 2.45 to 3.30 cents. The New York Board of Trade was closed for business last on Thursday and Friday in observance of the US Thanksgiving Day holiday and reopened on Monday.
NYBOT estimated on Monday's final arabica volume at 11,131 contracts, up sharply from the previous tally of 6,205 lots on Wednesday. Traders said the late-day fund buying was a technical move since there were no new fundamentals to justify the price rise following last week's sideways trade.
One trader expected the trend will continue upward on Tuesday, targeting $1.2510 as a key level for the March contract. "If we manage to stay there we're probably going to make a new high," the trader said. Some producers are holding off from selling until next year for tax reasons, another supportive factor, the trader said.
Colombia's coffee production this year was expected to rise over 7 percent to about 12 million 60-kilogram bags, while exports should inch up nearly 1 percent to 11 million bags, the Colombian Coffee Growers' Federation said on Monday. Last year, Colombia produced 11.2 million bags of coffee and exported 10.9 million bags.
US weather service, Meteorlogix, said it sees daily episodes of scattered showers and thunderstorms through on Thursday in Brazil, the world's top coffee grower.
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