London coffee prices closed higher on Tuesday as the market got back on its feet after falling to a five-month continuation low in early trade, but dealers were unconvinced about the durability of gains.
A $690 to $750 range was likely to hold as abundant supply weighed on prices and the proximity of the Brazilian winter should make shorts wary, a trader said.
The market quickly slipped lower after a modestly higher opening as speculators tracked New York's weak close on Monday but many turned around to buy back their shorts as fund selling found no continuity in the CSCE market on Tuesday.
"I think a lot of the morning shorts came back and covered it. They didn't get the feeling that New York was going to go on with the fund selling, which it didn't do and it's been steadying," a trader said.
Liffe benchmark July closed $14 up to settle at $716 a tonne on 7,100 lots out of a total turnover of 8,828 lots.
It moved between $721 and $696, which was last seen in early December 2003 for a second month.
Second most-active September gained $14 to close at $732 on 1,035 lots.
The July/September spread traded around a $16 discount, broadly flat from Monday.
COCOA UP: London cocoa futures closed slightly firmer on Tuesday, with origin selling limiting gains, traders said.
"The market is still running into selling from origin and fund short selling, and there's a lot of good scale-down buying around," a trader said.
Benchmark July closed four pounds up to settle at 790 pounds a tonne on 3,203 lots out of a total turnover of 7,178, moving between 790 and 775.
July hit a 30-month continuation low at 771 on Monday.