US arabica coffee futures edged up on Friday, boosted by light speculative buying and contract switching on the heels of a recovering robusta market in London, traders said. The New York Board of Trade's benchmark December arabica rose 0.7 percent, or 0.70 cent to settle at $1.0050 a lb., after trading from $0.9975 to $1.0180.
Back month arabicas finished up 0.25 to 0.60 cent, while the front-month September arabica added 0.80 cent to end at $0.9610 a lb. Spread trading and contract switching accounted for the bulk of the session's estimated futures volume of 18,135 contracts, traders said.
"Spread activity is dictating the volume, but you had a nice outright trading range as well," said a floor source. "There was some roaster interest but on the lower end of the range. They are certainly not paying up in the market at this stage," he said.
Market players have been rolling their positions out of the September contract ahead of its first notice day on Tuesday. Earlier in the session, the Brazilian real weakened about 4 percent to 2.467 per dollar on concerns of a widening political scandal in the world's No 1 coffee producer.
Some traders reckon a weaker Brazilian currency could prompt Brazilian producers to hedge more in the dollar-denominated coffee market, which would depress prices if roasters or speculators failed to support the market.
"Some people are using that for the reason for our sell-off in the middle of the day, but I don't think that was the case," said a trader. "There was some related options selling and that could've been Brazilian related," he said.
In other coffee markets, nearby robusta futures in London advanced 0.5 percent, while arabica futures in Sao Paulo stood 0.8 percent higher.
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