Arabica coffee trading on ICE Futures US ended a tad higher Friday on short-term buying based on a forecast of cold weather in top grower Brazil, in spite of a sharp rally in oil and other commodities. "Speculative buying and volatility has been pumped up to the up-side in the premium for the options, just in case if there will be a frost (in Brazil)," said one New York coffee trader.
As many as three separate cold fronts are heading toward Brazil's southern coffee plantations and could lower temperatures to near freezing, private forecaster Somar said. The benchmark ICE July contract settled up 0.05 cent at $1.3585 per lb, in dealings from $1.3445 to $1.3750.
The market closes at 3:15 pm EDT (1915 GMT). By 2:55 pm, July was down 0.20 cent at $1.3560 per lb. The contract's volume reached 15,354 lots. The July contract has been moving within a narrow trading range between $1.30 and $1.40 per lb since mid-March. The coffee market ignored sharp gains in other commodities, led by a more than $10 rally in crude oil. US crude futures ended up $10.75 at $138.54 a barrel.