US arabica coffee futures ended 1 percent higher on Wednesday, helped by a combination of speculative buying, lack of origin selling and a strong London robust market, traders said. A New York analyst said arabica coffee contracts gained because independent and day traders were trading for the long side, and there was also a lack of selling from origin.
"A stronger London robots market certainly helped things along," the analyst said. He added that short covering was also seen. Other traders cited speculative buying.
New York Board of Trade (NYBOT) open-outcry benchmark July contract rose 1.00 cent to close at $1.0625 after dealing $1.0505 to $1.0690. September gained the same to $1.0910 while the rest rose 0.95 to 1.45 cents. On the IntercontinentalExchange New York Board of Trade (NYBOT) electronic platform at 1:54 pm, the July contract was up 1.00 cent at $1.0625.
The rest of the week, "we are looking for $1.0730 initially, with the potential to go up to $1.0900," the New York analyst said. Brazil's government sold 97.9 percent of the 40,000 60-kg bags of coffee from federal stocks offered to all industry sectors at a monthly auction, federal Banco do Brasilia said on Wednesday.
Brazil is the top grower of arabica coffee. The first named storm of the 2007 Atlantic hurricane season formed off the US Southeast on Wednesday but it was not tropical and little strengthening was expected, the US National Hurricane Centre said.
One analyst said, however, this should not affect prices because it was well anticipated. New York Board of Trade (NYBOT) estimated 4,145 lots traded in open-outcry, compared with the total 12,094 contracts on Tuesday, when 8,636 contracts traded electronically.
Options calls volume was estimated at 10,480 lots with puts pegged at 2,894 lots. Robust coffee in London ended more than one percent higher on Wednesday on continued roaster and speculative buying against the backdrop of tightening world robust supplies, dealers said.
Liffe benchmark July was up $19 at $1,644 a tonne, just $4 off the day's high $1,648. It touched a low of $1,627. Meanwhile, Brazil's coffee belt will see mostly dry weather or a few light showers and cooler temperatures during the next several days, DTN Meteorlogix forecast.