Arabica coffee futures trading on ICE settled down 3 percent Friday, pressured by across-the-board profit taking and the firm dollar, traders said. "Some index fund was a steady buyer (yesterday) but today they are not. (This is) coupled with the rally in the dollar, and other commodities are getting hit," one coffee trader said.
The benchmark ICE July contract settled down 4.45 cents, or 3.1 percent, at $1.3745, dealing from $1.347 to $1.42. The market trades until 3:15 pm EDT (1915). By 2:50 pm the July contract was up 4.90 cents at $1.42. The rest ranged from 4.10 to 5.10 cents stronger. The Reuters-Jefferies CRB Index, which tracks prices of 19 commodity futures including coffee, also slid.
Participants were seen taking profits after the key contract settled at a five-week high Thursday. The dollar rallied against other currencies, making the dollar-traded coffee contracts more expensive for investors holding other currencies.
Position rolling out of May into other contract months began to wrap up ahead of the front month's first notice day Tuesday, traders said. Open interest for the May contract dropped 4,323 contracts at 28,090 contracts as of April 17, with July rising 3,416 lots at 86,008 lots, exchange data showed.
Meanwhile, in the top producer, rains will keep falling on Brazil's key coffee producing zones in the next few days and temperatures are set to rise, private weather service Somar forecast. On Thursday, 37,902 arabica futures contracts traded on ICE while total open interest eased 373 lots at 165,674 lots.