New York Board of Trade nearby coffee futures ended up 0.5 percent on Thursday as market players reined in gains led by strong technical signals, traders said. The New York Board of Trade 's (NYBOT) front-month September arabica contract rose 0.50 cent to $1.0625 a lb., after trading from $1.0550 to a fresh 3-week high of $1.0850.
"There is not a whole lot fundamentally here, the market is trading technically," said a trader, pointing out that buy-stop orders were triggered when the contract broke through the 40-day moving average at $1.0720.
"That got us to $1.0850, but the buying dried up and the market pulled back.
Those who sold $1.0850 came back in to support the market at the lows," he said.
Among other arabica contracts, December likewise gained 0.50 to finish at $1.1080 and the back months-advanced 0.30 to 0.45 cent.
Volume amounted to an estimated 11,583 contracts, up from the previous day's tally of 10,849 lots.
Elsewhere, robusta coffee futures in London ended 0.1 percent higher on the day, while arabica futures in Sao Paulo were narrowly mixed at 12:30 pm EDT (1630 GMT).
On the weather front, conditions for top coffee producer Brazil's 2005/06 harvest would be favourable during the next seven days, predicted forecaster US Meteorlogix on Thursday.
It forecast dry weather or just a few light showers in Brazil's main coffee belt on Tuesday and Wednesday.
Temperatures near to above normal were expected to cool to near to below normal in the coming week, Meteorlogix said, adding, "no damaging cold is expected."
James Corridor, president of Liberty Trading Group, said investors should be cautious to bet on poor weather when world supply appeared too ample, despite market expectations of a slight deficit this year.
"I think based on supplies in the US and abroad, that it's probably more dangerous to price in bad weather than it is to price in good weather, because with good weather this market can get killed," he said, pointing out that "we were at 55 cents two years ago."