US arabica coffee closed lower on Friday after speculative selling pushed it to a three-week low in technical dealings and thin trade, traders said. "It sounded like some of the short-term specs just sold the market right after the there's just not a lot of follow-through. It's a weather and technical market," one trader said.
NYBOT open-outcry July coffee dropped 0.95 cent at $1.1360 a lb., while benchmark September futures fell 1.30 cents to close at $1.1540 a lb., trading in a range from $1.1450 to $1.1725, a low dating back to May 31.
The rest closed in a range from 0.90 to 1.25 cent lower. On the ICE New York Board of Trade electronic platform at 2:06 pm, September coffee was down 1.55 cent at $1.1515 a lb. "Some of the momentum indicators show it to be bullish, others are bearish. We're two cents away from the 50 percent retracement level," one broker said.
Industry was expected to extend its coverage if the September contract falls to $1.10 per lb. while fresh origin selling was likely above $1.20, the broker said.
"Farmers are holding back a little bit," a dealer said. Producers in top coffee grower Brazil will sell their coffee at a government price-support auction for 4 million 60-kg bags of Arabic's on Wednesday, which was expected to sustain prices at a profitable level.
Arabica futures prices have been mostly rangebound this month as Brazil enters its frost season with average to above-normal temperatures forecast in the near future.