Arabica coffee futures ended a tad higher on Friday as investors took a breather in the wake of a rebounding dollar, a day after the market rallied to its highest level in more than a month, traders said. The May arabica coffee contract settled up 0.05 cent at $1.1620 per lb, the highest close since February 11.
Trading ranged from $1.1515 to $1.1810. May volume by 2:33 pm EDT (1933 GMT) at 10,887 lots. Coffee market looked overbought on intraday charts but remained positive for the near term, and dips are expected to be bought -softs trader. A stronger dollar, however, limited arabicas gains. On Thursday, sharply weaker US currency triggered widespread gains across the board in the commodities sector.
Coffee supplies are likely to be tight with consumption growing despite the economic downturn and production set to fall in 2009/10 - International Coffee Organisation. The worlds No 2 coffee producer Vietnam plans to keep its area for coffee cultivation stable at 500,000 hectares (1.24 million acres) this year to cope with falling prices, its agriculture minister said.
Colombia, the worlds third biggest coffee producer, looks set to produce 11 million 60-kg bags in 2009, down from last years 11.48 million bags, a spokesman for the National Federation of Coffee Growers of Colombia said Thursday.
Scattered to widely scattered showers and thundershowers forecast in No 1 coffee producer Brazil during the next five days, with seasonable temperatures - DTN Meteorlogix. Total volume Thursday hit 14,774 lots - ICE data. Open interest by March 19 at 139,795 contracts, up from the previous 137,396 lots - exchange data.