Arabica coffee futures settled at an eight-year high Monday, buoyed by fund and speculative buying that triggered buy stops, traders said. "Once we got over $1.416, stops were elected catapulting prices up to the $1.445 high. Interestingly though, we failed to see any follow-through," one trader said, referring to the March contract.
The ICE benchmark March arabica coffee contract trading on the floor closed up 3.60 cents, or 2.6 percent, at $1.427 per lb, the highest settlement for the spot month since December 1999, as seen on a monthly continuation chart. The rest ended up 0.15 to 3.60 cents.
On the screen, the March arabica contract was 3.55 cent higher at $1.4265 cents at 1:56 pm EST (1856 GMT), moving widely from $1.39 and $1.445. The rest, all of which hit lifetime highs, were up from 1.90 to 3.45 cents. "Index funds are buying more commodities, and spec and funds are going along with them," another dealer said.
Markets in top coffee grower Brazil will be closed until Wednesday afternoon for the annual Carnival festivities. The market closure kept a significant amount of selling out of the market, dealers said.
On the London market, robusta coffee futures rose to a 10-1/2 year high on follow-through buying. The Liffe May contract ended $30 higher at $2,182 a tonne, after moving from $2,151 to $2,190, a high last seen in June 1997 for the second month.
The ICE March robusta contract had not traded by 1:54 pm Final open-outcry volume was estimated by ICE at 3,665 lots, compared with 4,426 lots traded Friday, when 24,653 lots traded on the screen. Open interest increased 1,607 lots at 185,951 lots as of February 1.