US arabica coffee futures closed down mildly on Monday after speculative and local selling nudged prices to a fresh five-month low amid continued concerns of large supplies, dealers said. Light roaster buying prevented deeper losses, they said. "The market's still under pressure due to near-term supplies (which) are just abundant.
So we've been trading on both sides of $1.10 (basis May), which is a technical objective," one broker said. New York Board of Trade open-outcry May inched 0.10 cent lower to settle at $1.1025 per lb, the center of its trading band from $1.1120 to $1.0925 which marked a low last seen October 23. July fell 0.05 cent to $1.1315 and deferreds dropped 0.05 to 0.10 cent except for one contract.
On the IntercontinenalExchange NYBOT electronic platform at 1:59 pm EDT (1759 GMT), the May contract was off 0.05 cent at $1.1030 with July unchanged at $1.1320. "We're a little bit oversold here, so we might see some short-covering in the near to short term and see prices move higher.
But basically between now and April the seasonal trend is still lower," one trader said. Meanwhile, after a one-month dry spell, a cold front brought heavy rain to coffee farms in Brazil's main south-eastern coffee belt and more rain was forecast for this week, private forecaster Somar said on Monday.
Brazil is the world's top coffee growing country. Volume was estimated by NYBOT at 4,810 lots, compared with the 13,984 lots recorded on Friday when 8,372 contracts traded electronically.
Open interest rose by 782 lots to 140,569 lots as of March 16. Robusta coffee futures in London closed firmer on trade and speculative buying in thin volumes, dealers said. Lives may contract finished up $10 at $1,519 per tonne after moving between $1,523 and $1,501. In related news, most Tanzanian coffee prices eased at last week's auction due to the low quality of the beans on offer, traders said on Monday.
The Tanzania Coffee Board (TCB) said 19,633 60-kg bags were put on sale and 12,425 of them sold. At the previous auction, 20,584 bags were offered and 18,262 sold.