NYBOT arabica coffee futures closed firmer on Wednesday on speculative short-covering although the absence of chilly weather in leading producer Brazil will likely keep futures in a narrow band, brokers said.
July arabicas rose 1.35 cents to conclude at the days high of 73.10 cents a lb, with the session low at 71.30 cents. Key September gained 1.40 to 75.30 cents, ranging between 73.10 and 75.50 cents. Distant months increased 1.25 to 1.40 cents.
Traders said futures slipped on talk that a fund account would be a stopper in the London robusta coffee market.
When that failed to happen, overly short speculators were forced to cover, they said.
"Everybody was thinking we were going down because a fund was stopping the market in London. It did not take place so everybody jumped in and covered," a senior floor broker said.
Analysts said arabica coffee prices were seemingly trapped in a band from 72 to 76 cents, basis September, due to a dearth of market-moving news. "Were going to stay in a range until we get some weather news out of Brazil," one explained in referring to the winter season in the world's top producer and exporter of coffee.
In Brazil, meteorologist Somar said scattered showers fell in Esparto Santo but most of the coffee belt was warm and dry for harvesting.
Forecaster Meteorlogix said Brazilian coffee farms would enjoy mostly dry conditions with no sign of any damaging cold weather over the next 7-10 days.
Technicians said they see resistance in the September contract at 75.50 and 76 cents, with support at 73 and 72.50 cents. Final estimated volume reached some 12,813 lots, versus the prior count of 9,136 lots.
Call volume hit 4,533 lots while puts stood at 2,172 lots. Open interest in the arabica coffee market fell 149 contracts to 87,157 lots as of June 29.