US coffee futures wilted on Monday as small speculative funds sold on signs of improving crop prospects in top grower Brazil, traders said.
"Brazil is still getting a good amount of rain, and that is positive for the tree flowering," one trader said. On the New York Board of Trade, the most-active December arabica coffee contract slid 0.80 cent to settle at 73.85 cents a pound, after trading from 73.40 cents to 74.50 cents.
March 2005 dipped 0.70 cent to 77.10 cents, while longer-dated contracts settled down 0.55 cent to 0.60 cent. Traders said speculative funds dominated activity, while producers and roasters showed a modest presence.
"There was some minor amount of fixation by origin and some minor fixation by roasters today," one trader said. "We are in the middle of the prime roaster season, so you would expect more business to be coming.
But I know that the green coffee business was very quiet today," he said. On the weather front, private meteorologist Somar predicted Brazil's main coffee region would continue to get rainfall until midweek, following a dose of showers over the weekend.
Recent rainfall, which is important for tree flowering for next year's crop, has helped ease market concerns about tree stress from a dry August and September. NYBOT estimated volume reached 6,728 lots, compared with the previous count of 7,941 lots.
Coffee call options hit 2,165 lots, while puts stood at 631 lots. Open interest in the coffee market dipped 15 lots to 76,984 lots as of Friday. Technically, traders put support for the December delivery at 73.30 cents and then at 72.80 cents, with resistance at 74.50 cents and then at 75 cents.
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