CSCE coffee futures closed lower on Monday as speculators and funds liquidated long positions ahead of first notice day, ignoring a price increase by a major roaster, brokers said.
"The market has been looking for a retail price hike but this institutional price rise will be absorbed and not have a major influence on coffee futures prices," said soft analyst Ann Prendergast of Reface Inc, referring to the Folgers commercial coffee increase.
Folgers, citing rising prices for unfrosted beans as well as crude oil announced on Monday it would hike its food service and office coffee prices 4 to 6 percent as of May 3. Folgers is a major roaster and is typically the first to raise prices.
Active May Arabic futures settled 0.50 cent lower at 72.05 cents per lb. after trading 71.75 to 73 cents.
Dealers said the market was focused on first notice day for May coffee on April 22 and the rolling or moving of longs into July and September.
Estimated futures volume increased to 18,694 contracts on Monday from the 10,801 contracts that changed hands on Thursday. The exchange was closed on Good on Friday.
Analysts were unable to find much in the fundamentals to support bullish sentiment.
They said exchange certified coffee stocks were rising while roaster buying is tapering off with demand entering its seasonal slowdown ahead of the summer months in North America.
In addition, traders have increased their estimates of the coming Brazilian crop.
In December, Brazil's government forecast the country's coffee output would rise by 26 percent this year to 35.8 million 60-kg bags.
Good rains since January have lifted trade forecasts to the 42 million to 45 million-bag range.
Brazil's next official estimate is due in late April.
July coffee fell 0.45 cent to close at 74.50 cents after trading in a 74.20 to 75.25 cents range. The back months ended 0.25 to 0.45 cent lower.
The CSCE is a subsidiary of the New York Board of Trade.