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Slides To 1-Week Low
Arabica coffee futures dropped on the New York Board of Trade, erasing early gains and pushing into batches of underlying sell stops as speculators and locals sold. Industry buying eventually curbed the retreat.
Brazilian traders were out Monday for Carnival, and the Sao Paulo BM&F market was closed and won't reopen until 11 a.m. EST on Wednesday.
The March contract closed 260 points lower at $1.0835 a pound while May lost 255 points to $1.1025.
"Early on, we were higher as speculators hoped to take May up to $1.15," a desk trader said. "But with no follow-through buying, it failed at $1.1380. Other speculators started selling, and locals pushed into underlying stops. Selling from index funds pressured it too."
Industry buying lent support, but the market closed in the lower end of the day's range.
"We thought the market would do better today, with Brazilian-origin sellers away for Carnival and Friday's commitments of traders (report) considered constructive," because of a smaller fund-long position.
Futures volume was estimated at 14,570 lots, and in the options ring, 5,834 calls and 2,745 puts traded.
Brazilian beans will tighten heading into the late May start of the local 2006-07 harvest, keeping Nybot losses in check, New York traders said.
Sao Paulo and Minas Gerais, Brazil, were forecast to receive scattered showers Monday, turning mostly dry with a few light showers Tuesday, followed by scattered showers Wednesday, according to Meteorlogix. Temperatures are near to above normal.
Vietnam's exports in February are expected to fall 27% in terms of volume but rise in value, according to the General Statistics Office. The GSO said February exports should total 70,000 metric tons, or 1.17 million 60-kilogram bags, valued at $76 million. Vietnam's exports in 2005-06, which runs from October to September, are forecast to decline 12.5% to 10.5 million bags after drought reduced production, according to the Vietnam Coffee Association, or Vicofa.
Nybot-certified stocks rose to 3.612 million bags on Thursday from 3.611 million Wednesday, the exchange said late Friday. Some 153 Nybot March notices were posted Monday, bringing the total to 3,489 to date, with Rand Financial the major receiver so far.
Nybot Change Range (cents) Liffe Change (dlrs)
Mar 108.35 dn 2.60 108.25-111.50 Mar 1188 dn 3
May 110.25 dn 2.55 109.60-113.80 May 1203 dn 4
Asia Market
Coffee prices across Asia eased in the week, pressured by losses in international prices and increased selling interest, traders said.
On Monday, the May robusta contract on the London International Financial Futures and Options Exchange finished $4 lower at $1,203 a metric ton, down $17 from a week earlier.
In Vietnam, offers for robusta grade 2, 5% black and broken, were quoted around $1,140-$1,150/ton, versus $1,170-$1,180/ton, free on board, Ho Chi Minh City, last week.
"Trading activities are picking up slowly. Some farmers are worried that prices may have gone off their highs, so they've started cashing in their stocks to finance watering for the new crop," said a Ho Chi Minh City-based trader.
The main watering time for coffee trees in Vietnam is February and March before the onset of the rainy season at the end of April.
He added that with India's fresh crop already in the market and Indonesian robustas due in April, farmers are likely to release more of their stocks in the coming weeks as trading operations can slow to a crawl during the rainy season.
Vietnam's coffee exports in February are likely to have fallen 27% on year in terms of volume but risen 16.9% in terms of value, according to estimates issued Monday by the General Statistics Office.
The GSO said February coffee exports are expected to total 70,000 metric tons, or 1.17 million 60-kilogram bags, valued at $76 million.
Vietnam's coffee exports in the 2005-06 crop season, which runs from October to September, are expected to fall 12.5% to 10.5 million 60-kg bags, according to the Vietnam Coffee Association, or Vicofa.
Vicofa attributed the expected drop in output to a serious drought during the 2005-06 crop season.
In Indonesia, offers for Mandheling grade 3 arabica coffee were quoted around $2,950-$3,000/ton, FOB Medan, compared with around $3,200-$3,300 last week.
One Medan-based trader said that arrivals of arabica have increased as harvesting activities intensify. "The quality is not too bad. They (arabica beans) are snapped up easily, especially with buyers who have shorts to cover," he added.
In India, good demand amid increasing supply has kept trade brisk, traders said. "The market is bustling. Prices have come down slightly. Buyers find these levels fairly attractive, so there's good two-way trade taking place," said a Bangalore-based coffee exporter.
He said harvesting of fresh robusta is underway and will reach its peak next month.
"We may see prices easing further due to increasing supply but strong demand will keep the market well supported," he added.
India's coffee output is estimated at 281,000 metric tons in the current financial year to March, up from 275,000 tons in 2004-05, according to the Economic Survey, an annual report published by the Indian government ahead of the federal budget.
Exports, however, are projected to decline to only 127,000 tons, inclusive of exports after the processing of imported coffee, from 211,000 tons in the year-earlier period, said the survey.
Dow Jones Newswires
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