Fund buying triggered by firmer New York arabica prices kicked London coffee futures out of a well-trodden range on Tuesday, although the market backed off the highs at the close.
Traders said buy stops were triggered in the arabica market, which in turn enticed speculators in London to cover their short positions, injecting life into the market and taking September to its highest price in two weeks.
Liffe robustas, basis second month, had traded in a $680-715 range since July 6.
Benchmark September finished $18 firmer at $721 a tonne, having earlier peaked at $736. November added $17 to $732.
"The stops in New York set that one going," one trader said. "There are a few people who have been sitting short in London anyway...then someone came in with some reasonable buying, giving it a prod."
Although September managed to make gains of over four percent at its peak, it lacked the impetus to fill a chart gap on the upside at $735-739 left over from two weeks ago when the contract shed nearly $100 in two days.
Producers have been sidelined for the past two weeks, unwilling to sell their crops below $700, but were thought to be hovering above the market ready to take advantage of any further price strength.
Traders added that sentiment in New York had been aided by further reports of rainy weather in Brazil that might affect harvesting and crop quality. Independent forecaster Meteorlogix said unusually wet weather for the time of the year was disrupting the harvest.
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