New York coffee retreats from seven-week high

CSCE coffee futures closed higher on Tuesday but below a 7-week peak after a bout of profit-taking late in the session.
Brokers said local traders took their profits after riding an upturn fuelled by aggressive fund buying that overcame producer selling in the options pit.
"The funds hammered it, taking out the February highs. The afternoon pullback makes things look weak, but the funds are likely to come back Wednesday and take out 80 cents," said Ann Prendergast, softs analyst with Refco Inc in New York.
Active May arabica closed 0.45 cent higher at 77.90 cents per lb after trading from 76.30 to 79.50 cents which was its loftiest level since January 28.
Brokers said prices ended in the middle of their range, which they said showed that market players don't want to get caught short.
Local floor traders bought futures along with the funds, anticipating that strong buying would appear on the close of the session, according to the brokers.
"The MOC (market on close) buying didn't materialise and the locals liquidated their longs," said Prendergast.
Traders were unable to find a strong fundamental argument for current prices, citing building stockpiles of green coffee and a slower pace of roastings.
The Green Coffee Association said Monday that stocks for end-February jumped 204,590 60-kg bags to 5.828 million bags from 5.624 million at the end of January.
Complete Coffee Coverage reported that for the week ended February 21, 2004, roastings totalled about 400,000 60-kg bags, compared with 450,000 bags in the previous week.
Futures volume hit 22,338 lots Tuesday, double the 10,788 lot pace of Monday. In the options pit there were 5,594 calls and 5,647 puts.
Brokers said that coffee producers were active in the options market, buying puts to protect them against a decline.
Spot March settled at 76.55 cents, up 0.55 cent, with the back months 0.45 to 0.60 cent higher.
A strike by federal farm inspectors in top coffee producer and exporter Brazil could affect exports, but had no affect on prices Tuesday.
"The industry is concerned, but buying futures doesn't help if they need physicals and no one is buying extra spot coffee because a strike may not last long," said one dealer.