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CSCE coffee ends mostly lower in rangebound trade

NEW YORK: CSCE coffee futures closed mostly lower on Friday, with prices spending most of the session around the 108 cent-mark after an early test of resistance failed, traders and brokers said.

"It's horrible. We've just put ourselves back into the same old range. It's going to be a nothing here for another month or so," a Miami-based broker said. "We're just trying to absorb all this Mexican coffee, but really more than anything we have to watch the Commitment of Traders and green coffee."

March arabica ended 0.05 cent firmer at 108.80 cents a lb after trading 110.70-108.40 cents. May lost 0.05 to 111.55 cents and the rest slipped 0.05 to 0.30 cent.

Traders and brokers said futures rose shortly after the market opened on roaster buying, but met with heavy selling above 110 cents (March basis).

"You had some heavy resistance with good selling up there. Specs were good sellers," one floor broker said.

"As soon as the thing traded up over 110, it was just like sell, sell, sell," another broker said.

Open interest in spot March decreased by 804 lots to 20,152 lots as of Feb 10 whilst it rose by 795 to 20,448 lots in second month May.

Front-month March enters its month-long notice period on Feb 18.

Eyes will be turned to the CFTC's bi-weekly Commitments of Traders report, due to be released after the market close on Friday.

The previous report showed non-commercials, or funds, holding a net long position of around 7,500 lots. Most traders and analysts expect this position to have been reduced, although not entirely liquidated.

"I think they'll be 3,000-4,000 long and that's still a bearish number," one New York-based broker said.

"The market's in a downtrend and it should continue next week, but I think it's going to be a quicker kind of collapse. We expect to see the market trading around a dollar by the end of next week," he added.

Technicians peg support for March at 104.25 cents, with resistance at 114 cents, then 116 cents, followed by 118-120 cents.

Volume was an estimated 10,895 lots against on Thursday's official tally of 9,923 lots. Call volume reached an estimated 2,506 lots, whilst puts were seen at 1,581 lots.

The nine-day relative strength index (RSI) of March coffee stood at remained at 32 on Friday.

Technicians normally believe an RSI reading of 30 or less is an indication that the market is oversold, while 70 or more is usually a sign it is overbought on a short-term basis.

The CSCE is a subsidiary of the New York Board of Trade.-Reuters