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CSCE coffee consolidates, closes marginally up

NEW YORK: CSCE coffee futures saw another sideways trading session Wednesday, ending slightly higher although most operators see prices continuing to slowly erode, traders and brokers said.

"It's basically bracketed and it's oversold, but that doesn't mean it can't go lower," one roaster said.

Active May ended at 104.75 cents a lb, up 0.40 cent, after trading 105.45-103.70 cents. Spot March gained the same to 103.60 cents, moving in a 104.25-102.50 range. The rest rose 0.20 cent.

Traders said that locals attempting to trigger sell stops and some fund selling saw prices touch intraday lows, but short covering and light trade and industry type buying allowed arabicas to stage a mild correction.

"It was a decent volume for a sideways range...and there was very good volume in the switches," one broker with a trading house said.

Traders and roasters bemoaned the lack of fundamental news, as they looked ahead to Friday's CFTC Commitments of Traders report. "There's no news it's deadly," the broker said.

Several market operators contacted by Reuters said they expected the Commitments report to show non-commercials, or large funds, holding a net short position.

"Yes I think it'll show them short. But surprises could very well happen. If for any reason we don't come out showing (net) short, but square to slightly long, that could be another incentive to sell it and go below a dollar," the roaster said.

But another New York-based broker said that it was more important to look at the long and short positions separately, "as big longs have not necessarily got shaken out".

"I think what's important is the short side of the equation. Net, there could still be a small long position somewhere between 2,500 to 3,500 lots," the broker added.

The previous report showed non-commercials holding a net long position of 5,633 lots as of Feb 8.

"Coffee continues to slowly drift lower to new monthly lows. You had an up-day today, just a mild correction," Boyd Cruel, softs analyst with Chicago-based Alaron Trading Corporation said.

"The market's just oversold, but at this point, if the (certified) stocks continue to rise, it could push down to a gap at 100.55-101.50 (basis May."

U.S. certified stocks increased by another 14,140 bags to 1,111,795 60-kg bags as of Feb 22, compared to 1,089,905 bags as of Feb 18.

London's LIFFE robusta market ended at a new life-of-contract low of $1,007 on Wednesday. May last traded $14 down at $1,007 a tonne and was seen breaching the psychological $1,000 level on Thursday.

Open interest in spot March decreased by 1,004 lots to 5,913 as of Feb 22, whilst it swelled to 30,000 lots, up 330 lots in active May delivery.

Traders said support for May arabica stood at 104 cents, then 101.50 cents, while resistance will likely be found at 110 cents, then 112 cents.

Volume was an estimated 10,420 lots, against the previous official volume of 10,611 lots. Call volume reached an estimated 2,152 lots, whilst puts were seen at 802 lots.

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