CSCE coffee futures closed with moderate losses on Thursday as sellers showed up late in the session, but with fundamentals and technical offering mixed signals traders said the current range should hold for the near term.
Traders noted that the losses occurred on light volume and prices remain stuck in a range.
"They (sellers) were going after it on the close. The market's been stuck in a lower range for about a week, since it broke down and came to a major downside channel," said Ann Prendergast, a commodity market analyst at Reface.
"Today," she added, "it pushed the upside and elicited selling on the close. Funds were said to be buyers on the but, technically, it looks week." Most-active July coffee finished 0.95 cent lower at 70.10 cents, trading from 70.10 cents to 71.60 cents.
May Arabic fell 0.95 cent to end at 68.05 cents a lb., setting a range of 68.10 cents to 69.50 cents? The rest declined from 0.70 cent to 0.90 cent. On Thursday's final estimated volume was 9,750 lots, similar to the 9,453 trades on Wednesday.
Open interest in coffee rose by 811 lots to 93,446 lots as of April 28. On Thursday's coffee call volume was 2,719 lots, with puts at 2,742 lots.
Coffee prices managed to break above the lower channel in the weak, prompting some participants to anticipate higher prices.
Instead, they have floundered in a wide sideways pattern, with little to guide prices beyond the current range.
The much-anticipated crop forecast out of Brazil was lower than expected when released last on Friday, and elicited little market reaction.
Some tightness in Colombian coffee supplies has limited the downside, along with the frost season coming up at the end of May.
"Any reports from now on of cold weather from Brazil will set this market off," Refocus Prendergast said.
"We have support from the prospect of frost. But, other than that, the fundamentals are weak right now, and we're stuck in this debilitating range," she added. Technicians point to the double-bottom low formed on the May coffee chart at 69.30 cents as support and look for resistance at 72.10 cents and 73.80 cents.
Comments
Comments are closed.