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CSCE coffee settles up on options-related buying

NEW YORK: CSCE coffee futures ended higher Wednesday, supported by options-related buying in another featureless, rangebound trading session, traders and brokers said.

"The only thing we saw was very good options-related buying and a little light origin selling above the 119-120 area and no new news. Everyone is talking about Merrill Lynch," one broker said.

All contracts across the board gained 1.15 cents, with key March settling at 118.95 cents a lb after trading 120.50-116.90 cents. May closed at 121.70 cents.

Futures opened as predicted, edging progressively north on some options-related buying, with origin selling overhead keeping a cap on the higher end of the range, brokers said.

"Today we have very good buying in the options again. It's very quiet with a little bit of origin selling above 118.50 cents. Otherwise it's dead," one Miami-based broker said.

In other news, Merrill Lynch & Co. Inc, one of the world's leading investment banks and brokerages, plans to exit much of its commodities business.

Merrill Lynch commodities staff in Chicago and New York told Reuters they learned of the shutdown when they arrived at work on Wednesday morning. They said the company planned to make an announcement around 2:30 p.m.

Arabica prices have fallen back after a sharp rally on Monday and have been trading quietly as market operators had second thoughts about private forecaster Leon Yallouz's 2000/01 crop estimate for top grower Brazil.

"There's a bearish sentiment out there, that's got a hold of the market, with people saying the number was too low etc. Of course, if it had come out at 32 million, they would have been saying that it was way to high," one broker with a roaster said.

"I think people are waiting for a little more direction to see what the physical market does. Where it goes, what it does, where the reality is," one broker said.

Light summer showers will provide the only rain to fall over Brazil's coffee belt until the weekend although a cold front may bring wetter weather later next week, meteorologist Somar said.

Technicians peg resistance in March at 122-123 cents, then 126 cents. Support was put at 114-113.50 cents, then 109-110 cents.

Volume reached an estimated 5,975 lots against the 4,395 lots previously. Call volume reached an estimated 5,366 lots, whilst puts were seen at 1,861 lots.

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