CSCE coffee futures fell four percent to touch a two-week low Wednesday as commodity funds sold, reducing their record long position before the approach of first notice day, brokers said.
"First notice day is February 19 and the funds are getting out of some longs and rolling others," said one broker, referring to the date when coffee traders can tender or make delivery of the physical commodity.
The benchmark March coffee future was trading 2.15 cents lower at 72.50 cents per lb at 1159 EST (1659 GMT), bouncing away from the bottom of its 71.60 to 74.00 trading range.
Bean prices were testing levels last seen on January 20, a two-week low.
Traders said some light buying from roasters and speculative bottom-picking cut the day's losses.
On Friday traders learned from the CFTC's weekly Commitment of Traders report that the funds held a record 23,221 contract net long position in the week ended January 27 up from 9,941 lots net long in the week ended January 20.
Brokers said funds and speculators were reducing a record long position in the futures market acquired as prices moved up since late November on a growing perception of tightness in supplies of green coffee.