Arabica coffee futures finished a touch weaker on Monday following last week's rally that had vaulted prices to their highest in two weeks. "We saw some call spread buying on, but in the last hour and a half we were pretty even," said a trader. The New York Board Of Trades benchmark July arabica contract ended at $1.2735 per lb., down 0.45 cent, after trading from $1.2475 to $1.2870. More distant deliveries closed 0.50 to 0.95 cent weaker from Monday, while spot-month may dipped 0.40 cent to end at $1.2440.
Arabica futures opened down in line with weaker robust futures prices in London as weekend rains in Vietnam eased concerns about drought in the world's third biggest coffee producer.
Speculators and industry took an opportunity to buy as prices made their descent. "We were seeing some good buying on the breaks," said Boyd Cruel, senior softie's analyst at Alaron Trading.
Last week, arabica futures climbed about 11 percent amid concerns about dry weather in Vietnam, coupled with some speculation about the chance of frost in No 1 coffee grower Brazil.
"We are just starting to build some of that weather premium, especially if we are already expecting a smaller crop this year," Cruel said.
On Friday, Brazil's government forecast the 2005/05 (July/June) coffee crop at 32.46 million 60-kg bags, compared with 38.6 million bags in 2004/05.
The latest projection was a small revision up from the 31.87 million bags the government forecast in December. The New York Board Of Trades estimated trading volume in arabicas reached 12,680 lots, below the official tally of 15,614 lots the previous session.
On the charts, traders pegged technical support in July arabica at $1.25 and resistance at $1.3175.