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CSCE coffee inches up in rangebound activities

NEW YORK: CSCE coffee futures closed slightly higher on Wednesday, supported by roaster buying, but good selling from origins capped any advance above the 118-cent resistance level, traders and brokers said.

"You have the weight of origin above the market -- Mexico and Central America -- and below, you seem to have European industry-type buying. It's difficult for the market to go anywhere at the moment," one trader said.

Key March arabicas closed up 0.95 cent at 116.70 cents a lb after trading 118.25-114.75 cents. May rose the same to 119.60 cents a lb and the rest rose 1.00 cent.

Futures opened higher than predicted and saw choppy trading throughout the morning, with most of the activity coming from locals and day traders, brokers said.

An attempt to press the market down after the publication of revised U.S. warehouse stock figures was shortlived, brokers said.

"It (dip) was probably a combination of that (GCA revised figures) and the market didn't look good at that point. A few of the stale longs got out, using that as an excuse," one broker with a major coffee house said.

Green Coffee Association said Wednesday that data for U.S. warehouse coffee stocks for December were "erroneously reported" when they were released on Tuesday.

U.S. coffee stocks registered an increase of 230,000 60-kg bags to 2.627 million bags, GCA said.

One broker said futures were not looking good at the moment. "I think it looks rangebound and it's eventually going to go lower," he said.

But another trader was more confident, adding that once the market had "waded through some of this Mexican coffee," it could look steadier.

Arabica prices have been coming under steady pressure from an onslaught of Mexican coffee sales as producers try to fix prices.

Coffee production in Mexico is predicted to reach a record 6.2 million (60-kg) bags in 1999/2000 harvest, according to the state-run Mexican Coffee Council.

Technicians said that resistance for key March contract was around 120 cents, then 126 cents. Support was pegged at 113-112 cents, then 109-110 cents.

Volume was an estimated 8,983 lots on Wednesday against Tuesday's official volume of 9,071 lots previously. Call volume reached an estimated 4,766 lots, whilst puts were seen at 1,075 lots.-Reuters