London coffee futures closed lower on Thursday on light speculative and origin selling and with most of the buyers undecided to bid at current prices, dealers said.
The market crawled down from the opening as short-term speculators banked recent gains and extended lower as New York traded weaker.
Dealers said there was roaster interest but mainly below the market, while steady scale-up selling from Asia was likely to cap the market in the $734/740 a tonne area.
Benchmark July closed $6 lower at $722, having moved just 2,406 lots in a narrow $727-720 range out of a total volume of 3,936 lots.
J.P. Morgan analyst Robin Wilkin said early on Thursday the market was soft and resistance was likely to hold at previous highs around $737/738.
Further resistance would come at $750 and then at $765, which was the peak seen on April 2.
"It looks range-bound between $712 to 737. Within that you sell upticks, looking for this grind lower to continue. Anywhere between $730 and $750 is a sell," he said.
Further support was at $700.
September lost $7 to close at $738 on 905 lots.
Dealers said a large speculative long position of around 25,000 lots had been buying the market aggressively.
A trader said fund players with a long-term view could be supporting the market at current levels.
But others dealers were unconvinced about the upside potential.
"They might be looking at it from a long term perspective but if you work on this on an everyday basis, maybe we are missing the wood for the trees, but you need the patience of a saint to see this market going up," a trader said.
"With 4.8 million (60-kg) bags of certified stocks (in the United States) and 28,000 lots of Liffe stocks, you certainly get the feeling that the market is well supplied."
In the short term, origin and trade offers were likely to cap the upside.
Dealers also questioned recent crop outlooks from the Brazilian government for 2004/05 and said they were below market expectations of a 43-45 million 60-kg bag crop next season.