Arabica coffee futures closed sharply lower on Wednesday, after late-day fund selling triggered sell stops in an inside day that retraced Tuesday's gains, traders said. "The market's just consolidating between $1.30 and $1.35, just kind of following the other commodity markets' weakness due to the global economy," one dealer said.
Speculators were also seen on both sides of the market, they said. The key ICE March arabica coffee contract trading on the floor settled down 3.70 cents, or 2.7 percent, at $1.313 per lb, while the rest ended from 3.10 to 3.75 cents weaker.
On the screen, the key March arabica contract was down 3.50 cents at $1.315 cents at 1:53 pm EST (1853 GMT), spanning $1.308 to $1.353. Arabica coffee prices are expected to fall this year as world production climbs, a Reuters poll showed on Wednesday.
Key support for the benchmark March contract was pegged at $1.30. Robusta coffee futures trading on the London International Financial Futures Exchange climbed to a 9-1/2-year high on renewed fund buying. This provided underlying support for arabica futures and prevented deeper losses, traders said. Liffe's March contract settled $2 lower at $2,045 a tonne, after touching $2,060, a high last seen in May 1998 for the second month. The ICE March robusta contract had not traded by 1:54 pm.
ICE estimated final arabica pit volume at 3,012 lots, compared with the heavy 4,103 lots traded in open-outcry Tuesday, when 28,238 lots traded on the screen. Open interest fell 2,326 lots to 175,730 lots as of January 22.