New York coffee tumbles to three-month low

The benchmark arabica coffee futures contract slid 2.6 percent to a three-month low Wednesday, depressed by heavy trade, speculative and fund selling when it failed to hold support at last week's bottom price, market sources said.
The New York Board of Trade's washed-arabica contract for May delivery shed 2.80 cents to settle at $1.0415 a lb, the lowest since December 21. July also lost 2.80 cents at $1.0685 a lb, while back months fell 2.25 to 2.90 cents.
When the nearby contract fell below $1.0440, last week's weakest trade and a key technical support level, automatic stop-loss sales drove the contract down to as low as $1.0350. "There was trade selling today, with some longs throwing in the towel. We saw some system sell-stops below last week's low of $1.0440," said a coffee trader at a large investment bank.
Other traders attributed some of the bearish sentiment to options-related activity and light selling by coffee producers. "Towards the end we saw some origin selling as well," said Hernando de la Roche, director of Hencorp Coffee Group in Miami. He summed up the session as a "technical" move.
Traders said roasters appeared to be well supplied, despite some market worries about relatively low exchange-certified warehouse coffee stocks and sluggish exports of high-quality beans from producing countries.
"The roasters are quite full so they are stepping back. I think they're interested at buying the market below $1 in May," said a coffee trader.
The NYBOT certified coffee stocks on March 20 stood at 3,516,890 60-kg bags, down about 2.8 percent from the same period the previous month. By comparison, exchange-certified stocks were 4,490,600 bags on March 21, 2005.
Meanwhile, world coffee exports totalled 6.17 million bags in January 2006, a decrease of 16.5 percent compared with the 7.39 million bags recorded in January 2005, the International Coffee Organisation reported last month.
Coffee futures trading volume fetched an estimated 18,229 lots on the NYBOT, well above the 11,574 lots officially tallied the previous session.
Open interest in coffee futures on March 21 rose 130 contracts to total 99,731 lots, exchange data showed.