New York coffee futures end firm

US coffee futures posted a modest gain on Tuesday, although bullish speculators lacked the muscle to drive prices outside the top of a one-week trading range, market sources said.
The New York Board of Trade's benchmark arabica contract for May delivery rose 1.25 cent to settle at $1.0695 per lb, after trading from $1.0615 to $1.0820 inside a seven-day trading range of $1.0440 to $1.0980.
But that may soon change, said Jack Scoville, a vice president at the Price Group, a commodities brokerage. "We've seen the speculator selling start to peter out right about here," he said. "They (speculators) are starting to come back in on the long side.
I don't think there is a lot of downside left," he added. Among other coffee futures, the NYBOT's July delivery advanced 1.25 cent to end at $1.0965 a lb and the rest of the curve gained 1.25 to 1.95 cents. Arabica futures turnover on the NYBOT fetched an estimated 10,480 lots, up from the 8,328 lots officially tallied the previous day.
Looking ahead, the government of top producer Brazil will announce on April 7 its latest projection for the 2006/07 (July/June) crop. In December, Brazil pegged 2006/07 output between 40.4 million and 43.6 million bags.
"Brazil's 2006-07 crop isn't coming close to initial trade beliefs of 50-plus million (bags) and is more likely at the low end of expectations," said Judy Ganes of J Ganes Consulting. Last week, US-based Mercian Coffee Group said Brazil's 2006/07-coffee crop would not reach more than 45 million 60-kg bags.
"Stocks in Brazil and other origins are very tight. Colombian production/exports are down season to date, and consumer inventories are being shuttled around to fill needs," said Ganes. Colombia is the second biggest producer of arabica coffee beans behind Brazil.
Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic fell about 11.73 percent to about 2.28 million 60-kg bags in February, Guatemalan grower group UNICEF said last week.
"(The) market is on borrowed time with little cushion for any difficulties to tip the scale and send the market racing higher," she added. Still, so far this year the benchmark arabica price has been drifting between $1.0440 and $1.2850 well below a contract peak of $1.4850 reached on March 11, 2005.