Arabica coffee futures declined on Tuesday for the fourth consecutive session as speculators and funds trimmed their long positions in line with the broader commodity market, traders and analysts said. At the New York Board of Trade, the benchmark July arabica contract slipped 1.3 percent, or 1.65 cent, to $1.2190 per lb., after touching an 11-day low at $1.2160 and peaking at $1.25. The September delivery likewise fell 1.3 percent to $1.2465, while more distant months retreated 1.2 to 1.3 percent. "Overall, we are getting in a correction mode," said Rodrigo Costa, an analyst at Fimat USA. "It's a commodity market liquidation," he said.
The Reuters CRB Index of 17 commodities was down 0.9 percent at 300.13 by 1:46 pm (1746). Arabica futures have declined more than 7 percent over the past week.
The market has been choppy since July hit a contract and five-year peak at $1.4175 on March 11. "The fundamentals are still positive for coffee.
We are at a period where there is little coffee from origin, and people are waiting for the crop to come," Costa added. In Brazil, the leading arabica producer, Santos-based broker Carvalhaes said fundamentals were bullish because Brazil's crop, officially estimated at 32.5 million 60-kg bags, will not cover domestic and export demand and will probably result in a drawdown in stocks, Reuters reported from Brazil.
Still, trading volumes were relatively thin. NYBOT estimated trading of arabica futures reached 11,141 contracts, down from Monday's official 15,292 lots.
Technically, traders put key support in July arabica at $1.2150, and then at $1.1950, with resistance at $1.25 and then $1.2925.
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