US cocoa futures inched higher in early trade on Friday, on continued March/May spreading, while arabica coffee futures crept lower in rangebound trade, dealers said. "You will see a lot of spread trading," one cocoa trader said.
All week, participants have been rolling positions out of the March contract into May ahead of the spot month's February 15 first notice day. The screen-traded ICE March cocoa contract was up $16 at $2,350 per tonne at 9:19 am, in a trading range from $2,321 to $2,355. The rest were up from $11 to $17.
Coffee moved lower in sideways trade for the fourth straight day, with options-related trade attributing to the narrow range as March options expire on the day.
"Four days of consolidation at the upper end of the recent range is somewhat constructive to the market," one trader said. "There's a protective buyer below $1.42 (basis March)." The electronically traded March coffee contract was down 0.60 cent at $1.427 at 9:20 am EST (1420 GMT), in dealings from $1.42 to $1.4305. The rest ranged from 0.70 to 0.80 cent lower. ICE March robusta futures was untraded by 9:21 am.