US benchmark arabica coffee futures rose to a six-day peak on Wednesday, fuelled by speculative buying amid concerns about tight robusta supplies and limited producer selling, traders said.
The New York Board of Trade's benchmark arabica coffee contract for December delivery gained 1.70 cents to end at $1.0860 a lb after trading from $1.0780 to $1.1075.
Back month arabicas advanced 1.60 cents, while September, which has its first notice for delivery on August 23, climbed 1.80 cents to conclude at $1.0465 a lb.
"We're following London. Certainly there is worry about tightness in robustness, which has spread through their market. And we have dryness in Brazil," said a coffee trader at an investment bank in New York. Life's most active November robusta contract in London surged $45 or 3.2 percent to finish at $1,443 a tonne, having dealt from $1,408 to a contract peak of $1,472.
It was the loftiest price for a second-month contract on a continuation basis in 6-1/2 years. Benchmark robusta futures have scaled new contract peaks over the past several sessions as market participants talk of a supply crunch in Vietnam, the top robusta producer and the world's No 2 coffee grower after Brazil.
While traders and analysts reckon roasters are well covered with arabicas in the near term, some producers are reluctant to sell due to a combination of a weak dollar and limited rainfall for crop development in Brazil, traders said.
"It's very important to stress that nobody is buying on the dry weather in Brazil, people are just backing off their selling because of the weather conditions," said Rodrigo Costa, a vice president at Fimat USA.
Costa pegged technical support in the December arabica at $1.0730, with resistance at $1.1075 and then $1.1310. On the weather front, US forecaster Meteorlogix predicted a chance for a few light showers in Brazil's coffee belt over the weekend. "Dry weather bears watching as it could impact the spring flowering of the trees if it continues," it said.
New York Board of Trade arabica futures trading volume reached an estimated 28,854 contracts, up from the 20,716 lots officially tallied the previous session.