US coffee futures edged up on Tuesday, extending yesterday's gains amid small speculative interest and contract rollover between the two front months, traders said.
Roasters appear to be amply covered for the onset of the winter consumption period across North America and Europe, while the market has little to fret about supply, they said.
"We are going into the largest demand period in the Northern Hemisphere. You have roasters wanting to buy on the dips, and there is very little production fear for the 2005 crop, said James Corridor of Liberty Trading Group.
NYBOT's most-active December arabica coffee contract inched up 0.20 cent to settle at 75.80 cents a pound, after trading from 75.10 to 76.05 cents. March 2005 firmed 0.25 cent to 78.85 cents, while longer-dated contracts rose 0.30 to 0.65 cent.
"The market is flat. There was very little institutional paper in the market," said one trader. "It was mostly locals. The biggest activity was December-March trading," he said, referring to contract switching between the front-month futures.
The December delivery, which expires on December 20, has a first notice day on November 18. With top grower Brazil's coffee harvest nearly complete, the market awaits estimates for the 2005/06 season.
Recent rainfall in Brazil's coffee belt has helped tree flowering for the 2005/06 crop, while abnormal weather in the year has distressed some of the trees.
On the weather front, private forecaster Meteorlogix predicted scattered showers in Brazil's major growing areas Sao Paulo and Minas Grease today, followed by mostly dry conditions until on Monday. NYBOT estimated volume for coffee futures reached a mere 7,488 lot, compared with the previous count of 13,312 lots. Coffee call options fetched 1,892 lots while puts hit 1,841 lots.