New York coffee gains

CSCE coffee futures finished with healthy gains on Tuesday, after hanging in negative territory for much of the session, but traders said funds came in and grabbed coffee at the lows for a late rally.
"Yesterday's negative close generated some selling from some of the more bearish directions in the market. But, discretionary fund buying helped to reverse the losses.
Once the selling dried up, funds started to pay up," a dealer said.
Benchmark May arabica futures ended 0.85 cent higher at 72.80 cents per lb, towards the high end of the 71.60 to 73.00 cents trading range.
While on Tuesday's buying was mostly speculative, traders said the selling came from trade and short-term speculators.
One trader noted that along with coffee, sugar also had a late-day rally, and cocoa pulled off its lows by the end. He surmised that commodity funds looking to put their money into hard assets were in buying coffee at the lows.
Some of the selling was also due to rollover business. First notice day for May coffee is April 22. Traders said speculators and funds were liquidating May futures and rolling long positions into July.
Open interest was reduced to about 51,600 lots on Tuesday from over 56,000 contracts at Monday's close.
While speculators drove coffee higher on Tuesday, some traders were quick to point out that fundamentals supported a more bearish view.
They said certified coffee stocks were rising in US ports, forecasts projected an increased crop, and roastings were slowing.
One trader said he thought roasters appeared to be waiting for a downside break of 70 cents a lb. On the May contract to extend their coffee holdings.
And, traders said top producer Brazil's forecast for an increased crop has been testing bulls' resolve. In December, the Brazilian government forecast the country's coffee output would rise by 26 percent this year to 35.8 million 60-kg bags.
Trader's forecasts are much higher, however. Noting the abundant rains since January, they said they estimate Brazil's crop will be in the 42 million to 45 million bag range.
Brazil's next official estimate is due in late April. July coffee rose 0.90 cent to close at 75.15 cents a lb in a 74.05 to 75.30 cents trading range.
Back months settled from 0.85 to 1.05 cents higher. Estimated futures volume 11,642 lots on Tuesday, less than the 23,737-lot turnover on Monday.
Total open interest rose by 470 lots to 103,645 on Monday. CSCE is a subsidiary of the New York Board of Trade.