CSCE coffee futures closed with sharp losses on Wednesday as many players sold their coffee positions a day before first notice day in the May contract, New York coffee brokers said.
"It's been a little crazy today with tomorrow being first notice day (for May coffee). You had a lot of people squaring up positions, a lot of people getting out of their May positions ahead of the notice period," said one coffee trader.
"There was some fund selling, too, by players who didn't want to take delivery," he added.
May Arabic fell 2.30 cents to end at 67.35 cents a lb., trading between 67.10 and 69.75 cents? Active July dropped 2.20 cents to 69.65 cents, after trading from 69.55 to 71.70 cents. Back months-lost 1.15 cents to 2.10 cents.
"There was selling by funds and then scale-down trade buying. Most of what we were seeing was just people squaring out their books before first notice day," said one dealer.
While some players rolled out of May futures and got into latter-dated contracts, dealers said, a lot of funds just liquidated their holdings altogether.
Open interest in coffee rose 173 lots to 86,782 lots as of April 20. Final estimated coffee volume was 32,898, well up from 11,210 lots on Tuesday.
Coffee call volume was seen at 3,994 lots with puts at 3,642 lots.
Otherwise, traders said, participants were waiting for next week's release of the latest official crop figures from Brazil, the world's top producer and exporter.
Weather service Meteorlogix said it saw favourable conditions for developing crops in Brazil, with temperatures near to above normal.
Favourable weather prompted analysts to forecast output in Brazil between 40 million and 45 million 60-kg bags. Brazil had forecast coffee output at 35.8 million bags last December.
Technical analysts said support in May now rests at 66 cents, with resistance at 71.70 and 73 cents.
The CSCE is a subsidiary of the New York Board of Trade.