Arabica coffee on trading ICE Futures US ended firm on Friday, but below a three-week high after origin selling capped gains from an rally of fund buying, dealers said."We triggered stops and only near $1.40, the origins started to sell," said one coffee trader, about the July contract.
The benchmark ICE July contract settled up 2.00 cents at $1.3655 per lb, trading from $1.3445 to $1.40, a high last seen April 18. The market trades until 3:15 pm EDT (1915). By 2:55 pm, the July contract was up 1.20 cents at $1.3575. The rest ranged from 0.45 to 3.15 cents higher.
The market rallied 4 percent during trade after a flood of fund buying amid a lack of selling interest triggered buy-stops around $1.359 per lb, basis July. Buying was encouraged by the weak greenback that made the dollar-traded commodity cheaper for investors holding other currencies.
Origin selling then capped gains and pushed the market off its highs. It was June options expiry. The top producer Brazil's coffee output should come in at 50 million to 53 million 60-kg bags in 2008/09 well above Brazil's increased official forecast of 45.5 million bags, illycaffe Chairman and Chief Executive Andrea Illy said on Friday.
Weather in Brazil, mostly dry conditions was forecast on Saturday with dry weather on Sunday through on Tuesday, with temperatures averaging below normal, DTN Meteorlogix said. "I think there is a psychological change because of the cold weather this week in Brazil," a coffee broker said, about another element of support.
Robusta coffee futures trading on the London International Financial Futures Exchange (Liffe) rallied on investor and fund buying spurred by the weaker dollar. The benchmark July robusta coffee contract ended up $67 at $2,231 per tonne, in a wide trading range from $2,154 to $2,276.On Thursday, 18,249 arabica contracts traded on ICE while total open interest fell 328 lots at 147,856 lots.