20000109CSCE coffee slips further on Yallouz market talk

NEW YORK: CSCE coffee futures received a further blow on Thursday as speculative selling based on rumours concerning top grower Brazil's upcoming coffee crop continued to dominate activity, traders and brokers said.

Key March arabica shed 2.70 cents to finish at 114.15 cents a lb, trading between 117.75 and 113.80 cents. May lost the same to close at 116.85 cents a lb whilst the rest of the board fell by 2.55 cents.

Rumours continue to abound in the marketplace regarding the upcoming report from private forecaster Leon Yallouz with his estimate for top grower Brazil's 2000/01 coffee crop.

The report is widely thought to be released during the weekend and market sentiment points to Yallouz's prediction coming in higher than the official estimate of 28.9 million 60-kg bags.

"It's all nervousness about Leon Yallouz. They're thinking that the figure is going to come out tomorrow and there are more rumours going around that his figure is going to be high," one Miami-based broker said.

Arabica futures opened slightly higher, but were rapidly pushed down through a key support level by speculative selling, fuelled by nervousness concerning the Yallouz figure, brokers said.

"There was good support down there, it's a good area to buy it, but the problem was that it broke down through 115 early and couldn't get back above it," one floor trader said.

Traders said that many players remained sidelined, explaining the modest volume traded, preferring to wait for the release of the Yallouz forecast.

"What I don't like about it is how we have to sit around and wait for this thing and the market is nervous. Is it that important what he thinks?" one veteran coffee broker said.

Arabica futures languished in a tight trading margin throughout the rest of the day, moving in a one-cent range.

"Let's hope he (Yallouz) doesn't drag it out. I just hope that it comes out this weekend and we can get it over with and get back to a market that's looking at fundamentals," the broker added.

Analysts and traders contacted by Reuters are calling for him to put out similar to slightly higher numbers than the official Brazilian estimate of 28.90 million 60-kg bags.

In other news, Brazil's key Santos port this week experienced a computer hiccup in its customs process related to the so-called Y2K bug, but authorities said it was not hampering South America's busiest seaport.

Technicians said resistance in March arabica stood at 122-123 cents, then 126 cents. Support was pegged at 114 cents, then 109-110 cents.

Volume traded reached an estimated 8,285 lots against the 5,778 lots previously. Call volume touched an estimated 3,266 lots whilst put volume was estimated at 2,830 lots.

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