20000226

CSCE coffee erodes further in unenthusiastic trade

NEW YORK: CSCE coffee futures extended their slow downward movement on Wednesday to settle lower on light speculative and local selling, although roaster buying lent some light support once again, traders and brokers said.

"There's really no participation to push it down, but there's certainly no interest in buying it up," one broker with a major coffee house said.

Active on May ended the day just above its intraday low at 103.15 cents, 1.60 cents a lb lower, having traded between 104.90-103 cents.

Spot March arabica slipped back 1.85 cents to 101.75 cents a lb, moving in a 104-101.75 cent trading range. Back months shed 1.70-1.85 cents.

"It's a quiet market trading in a narrow range. I think it's moving towards that magic dollar level, but it's not willing to break out one way or the other," one buyer said.

Arabicas are currently languishing in a tight trading range, in a featureless market, although daily increases in US certified stocks continue to put pressure on prices, traders said.

Participants will be looking to on Friday's release of the latest CFTC Commitments of Traders report, which will be published after the market closes.

There are conflicting views circulating in the market regarding the net position of non-commercials, or large investment funds.

Some traders believe the funds will be showing a net short position, although others say that open interest does not reflect that much of a drop and that they will still be net long.

Open interest stood at 49,844 lots as of on February 23, down 1,571 lots on the previous session.

The head of the International Coffee Organisation (ICO) said on Thursday the world's annual coffee consumption may exceed 135 million (60-kg) bags by 2050, compared with around 100 million bags currently.

But Celsuis Lodder added that global potential for production, on the other hand, was in excess of 150 million bags, compared with an average crop of some 100 million bags during the past three completed crop years.

London's LIFFE robusta market ended sharply down on Thursday, near fresh 6-1/2 year lows. on May last traded $14 down at $993 a tonne, having broken the psychological $1,000 level during the morning session.

Traders said support for on May arabica stood at 101.50 cents, then at the psychological 100 cent level, while resistance will likely be found at 106 cents.

Volume traded on Thursday reached an estimated 7,459 lots, against the previous official volume of 10,349 lots. Call volume reached an estimated 1,200 lots, whilst puts were seen at 643 lots.

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