Arabica coffee futures ended sharply lower on Wednesday on speculative fund profit-taking as the market extended its retreat from recent highs following the Christmas holiday break, traders said. The coffee market was shut on Monday and Tuesday for the Christmas holidays.
The electronic March arabica contract was down 0.55 cent at $1.3365 cents per lb at 1:06 pm EST (1806 GMT), moving from $1.30 to $1.349. The open-outcry March arabica coffee contract shed 0.55 cent to conclude at $1.3365 per lb, trading from $1.295 to $1.3495.
Back months lost from 0.45 to 0.65 cent. "It's been up so much on fund buying beyond any level we expected. What we got was mainly (fund) profit-taking and we could see more of this backing and filling until we get to next year," a dealer for an industry house said.
Analysts said that on a fundamental level, the roasters who would be in the market have more than ample coverage until possibly the middle of next month. Business was fairly modest, especially with the robusta market in London still closed for a holiday.
"At this point, the funds who drove the rally feel it is time to book those profits. I think we see more profit-taking (selling pressure) into the New Year so they are going to even up their positions," another dealer said.
In industry news, farmers in top robusta producer Vietnam said the harvest is nearly done. Open-outcry volume around noon was at 1,038 lots, versus on Friday's open-outcry tally of 609 lots. Total volume traded last on Friday was 3,866 lots, with screen trade at 3,157 lots. Open interest rose by 309 lots to 163,597 contracts as of December 21.
Comments
Comments are closed.