Arabica coffee futures closed with strong gains on Friday, after a rally to a two-week high, when funds bought the New York coffee contracts on London robusta prices storming up over five percent, traders said.
In a mostly technical move, some of the same funds who, earlier in the week, sold arabica down to 21-month lows were thought to be buying on the third consecutive day of advances, dealers said.
"There were probably some players who had gone short or thought they had to exit their longs when the market was going down, but then the market reacted positively. And I think you had a lot of those same guys jumping back in," said a coffee dealer at New York broker.
The New York Board of Trade's arabica coffee for September delivery finished with gains of 2.60 cents at 99.40 cents a lb. It soared to a two-week high at 99.70, and gapped higher at the open to set a low of 97.25 cents a lb.
The rest of the board leaped 2.60 to 2.85 cents by the end. Traders said the market encountered sizeable fund short covering when September futures moved above 98.20 cents a lb. And, they said prices were helped when origins refrained from selling, and stayed out of the market. "There was some origin selling into the rally, but it was nothing overwhelming." said one trader.
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