US coffee futures ended down nearly 2 percent on Monday after speculators sold on a cocktail of factors and drove the benchmark contract to its lowest level in four weeks, traders said.
Favourable crop conditions in top coffee grower Brazil, coupled with a dissipating storm in Central America and weak technical signals on the price charts, depressed the arabica market for the fourth consecutive session, they said.
The New York Board of Trade's active December arabica contract settled down 1.70 cents at 96.65 cents a lb., the weakest settlement since October 7 when the benchmark contract concluded at 94.85 cents.
March arabica shed 1.50 to $1.0020 and longer-dated futures retreated 1.0 to 1.45 cents. The December product has fallen 8.4 percent from its peak of $1.0525 last week to today's low of 96.40 cents, luring roasters to buy on a scale-down basis.
"Roasters are buying but on an as-needed basis," said a trader, adding that technical support in the December contract "should come in around 95 cents."
Weather forecasters predicted rainfall in Brazil's coffee belt this week, aiding development for next year's crop.
"Showers and thunderstorms ease stress to the flowering trees in Sao Paulo and Minas Gear's Brazil following significant periods of hot, dry weather during the month of October," US forecaster Meteorlogix said on Monday.
Traders reckon favourable rains could help Brazil produce up to 52 million 60-kg bags next year, or about 19 million bags more than the current season.
But traders agree it is give such predictions much weight. Meanwhile, traders said market concerns about crop damage in Central America eased somewhat on news that Hurricane Beta had weakened rapidly after making landfall in Nicaragua on Sunday.
Still, the extent of crop damage from Beta's wind and rains was not yet clear as the region prepares for new harvests. "Heavy rains with Beta have impacted parts of Nicaragua, Honduras and El Salvador.
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