US coffee futures settled narrowly mixed Thursday, with speculators taking small profits after driving prices up to their loftiest levels in more than a month, traders said.
The New York Board of Trade's (NYBOT) active March arabica contract eased 0.10 cent to end at $1.0690 per lb, after trading from $1.0640 to $1.0840.
The top trade was the highest for the contract since November 14. May arabica finished flat at $1.0910 a lb, and more distant months firmed 0.05 to 0.40 cent.
"The market is consolidating. There is a little nervousness ahead of year-end," said a trader.
"There has been a fair amount of speculative buying in an anticipation of index reallocation into underpeforming commodities in the beginning of 2006," he added.
Compared with stellar total returns in other commodities like copper, natural gas and sugar, the coffee market may be a bargain for investors.
As of December 27, the Goldman Sachs Commodities Index (GSCI) - a benchmark index of 24 commodities - showed year-to-date returns in copper, natural gas and sugar at 77.06 percent, 54.54 percent and 48.45 percent, respectively. Coffee has a year-to-date return of negative 8.90 percent.
"I think the funds will be aggressive buyers again from January 5 on," a coffee trader said, speaking from the trading floor of the New York Board of Trade.
The funds, he added, "usually come in hot and heavy" in January.
Estimated trading volume in New York Board of Trade arabica futures reached 8,616 contracts, down from the official tally of 12,050 lots on Wednesday.