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CSCE coffee bounces after steep selloff, ends up

NEW YORK: CSCE coffee futures rebounded to end firmer on Monday when speculative and roaster buying gave bean prices a boost after key May slid below the psychologically important 100 cents mark last week.

Mike Pucciarelli of Wechsler Coffee said arabicas came back after the speculative fund selling applying pressure on the market eased.

"It gave the opportunity for roasters to do a lot of buying in May," he said.

May arabicas settled up 2.75 cents at 102.10 cents a lb, just a hair beneath their day's peak of 102.20 cents after earlier falling to a session low of 99 cents.

The contract recovered one session after it had sunk 3.80 cents and touched a low of 98.40 cents, dropping below 100 cents for the first time since late October 1999.

Spot March gained 2.85 to 101.65 cents and the rest rose 2.95-3.15 cents.

The market gapped down to its low for the day at the onset of business when light fund sales pressured arabicas, but coffee futures could not even approach the low of 98.40 cents it touched last week.

Roaster buying provided the market a floor and speculative shortcovering through stops punched coffee into higher ground, brokers said.

Traders said the corrective technical bounce was expected after the severe mauling the market endured last week.

But market fundamentals remained depressingly bearish, especially since supplies were plentiful and a glut in robusta beans placed the London market under the hammer.

LIFFE coffee tumbled to near 6-1/2 year lows, with May setting a new lifetime low of $948 a tonne before settling $24 down to $953.

Traders said that on a technical basis, May arabica should derive support at the recent low of 98.40 cents whilst resistance would be at 103.25 cents. Above that, the 105 cents mark would attract a lot of grower selling.

Volume was an estimated 8,409 lots versus Friday's estimated tally of 14,496 lots.

Call volume reached an estimated 2,354 lots, whilst puts were seen at 1,905 lots.

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