20000105

CSCE coffee ends off on spec, local selling spree

NEW YORK: CSCE coffee futures crumbled from local and speculative profit taking into stops to settle weakly Monday, with market participants reporting no computer problems so far from the millennium rollover.

"We had a short-lived run-up (last week). Once the market opened lower, the people who had come in on the long side started to flee," said Prudential Securities analyst Arthur Stevenson.

March arabicas slumped 9.40 cents to finish at 116.50 cents a lb, down 7.46 percent on the day, after trading 124-116.10 cents.

Benchmark coffee had risen 6.90 cents in the preceding two sessions in a modest rally ahead of the New Year festivities.

May shed 8.90 to 119.50 cents today. Back months ran south by 8.75 cents each, except for September which fell 8.55 to 124.10 cents.

Coffee futures lost ground from the start, with the initial flurry of selling triggered by news of heavier-than-expected rains over the weekend in leading producer and exporter Brazil.

"It was all started by that rain in Brazil," a broker said, adding locals joined the bandwagon when they saw arabica prices plunge. "They saw the trend and they just piled in."

Weather Services Corp. (WSC) said widespread rains of 1-4 inches (25-100 mm) doused the coffee belt with more scattered showers and thunderstorms likely in eastern Sao Paulo and Minas Gerais.

The showers may linger into Thursday with mostly dry conditions by Friday, WSC said.

The selling was also aggravated by speculative players lightening up on their positions ahead of the release of the bi-monthly CFTC commitment of traders report later on Monday.

Market players said there were no problems so far linked to the 2000 rollover from the computers used by the trade.

"It may still be a bit early, but it looks good so far," one said.

US certified coffee stocks stood at 894,224 60-kg bags as of Dec 31 against 893,224 bags as of Dec 30. The number of bags pending grading stood at 13,450.

Technicians said resistance in March arabica stood at the recent peak of 126 cents. Support was pegged at 114 cents.

Volume reached an estimated 8,132 lots against Thursday's tally of 5,489 lots. The market was closed Friday in observance of New Year's Eve. Call volume touched an estimated 2,274 lots whilst put volume was estimated at 951 lots.

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