Arabica coffee futures finished mixed on Wednesday, though the benchmark contract moved inside the previous day's trading range amid a dearth of directional signals, traders and brokers said.
The New York Board of Trade's active coffee contract for July delivery settled up 0.10 cent at $1.09 per lb., after trading from $1.0770 to $1.0960. September arabica rose 0.15 cent to end at $1.1175 a lb., while back month contracts finished up 0.10 to down 0.30 cents.
Coffee traders said industry and producers were holding back, with independent brokers and speculators defending their positions. "There was some origin selling above the market at the highs," said a coffee trader at a trade house.
"But the market was pretty much dominated by the locals," he said. The benchmark July contract has been drifting aimlessly between $1.0625 and $1.1770 since March 1.
The bulls are concerned about producer selling as farmers in No 1 coffee producer Brazil harvest a new crop, with output in the 2005/06 season expected to be between 7 million and 12 million 60-kg bags above last season's official 32.9 million.
Meanwhile, the bears are unable to push prices too far down because of tight world supply/demand prospects. "If the market pulls back I think industry will buy it. And you just don't have the fundamental picture for it to run away on the upside without bad weather in Brazil," said a coffee broker at an investment bank.
On the weather front, US forecaster Meteorlogix on Wednesday predicted dry conditions with a chance for a few light showers in Brazil's coffee belt through on Thursday, followed by dry conditions Friday through on Sunday.
Temperatures would be near to above normal today and near to below normal thereafter, with low temperatures ranging from 48-55 F (9-13 C), it said.
Coffee futures trading volume reached an estimated 10,621 contract on the NYBOT, down from the official count of 11,297 contracts the previous day.