20000311

CSCE coffee ends off on profit-taking, local sales

NEW YORK: CSCE coffee futures settled with minor losses on Thursday after a late flurry of selling and profit-taking by small speculators dragged the market into negative territory and well below the day's peak.

"The locals had been long for most of the day so they bailed near the close," a Miami-based broker said.

May arabicas settled down 0.30 cent at 107.70 cents a lb after trading 110.25-107.25 cents. Spot March ended at 107.20 cents, off 0.20 cent, with the rest slipping 0.20-0.40 cent.

Arabica prices headed north at the open, buoyed by news the U.S. agricultural attache in Sao Paulo had pegged production in top grower Brazil for marketing year 2000/01 at 28.1 million 60-kg bags. Output in 1999/2000 was revised up some two percent to 27 million bags.

Attache reports are not official USDA data. The market also derived speculative support from talk that Brazil may implement a retention plan, with one broker saying rumours had it going into effect as early as Monday, brokers said.

But origin selling swiftly capped the advance, especially when May poked its nose above 110 cents.

By the end of the day, the talk on Brazil retention had lost a bit of its potency as well.

"(A price of) 110 cents in coffee is not too bad. We also have a lot of stocks around so I don't know what the sense would be in going for a retention plan at this time," one analyst said.

The Association of Coffee Producing Countries is scheduled to meet in London during the week of March 20 to work out the scheme.

In Brazil, coffee exporters reacted with dismay on Thursday to the government's recent rule change for overseas sales registrations, saying its reduction of the permitted time period made little sense.

Brazil's government had announced this week it was cutting the period permitted for exporters to register coffee sales by 30 days in a bid to regulate supply flow and raise revenues.

On a technical basis, traders said May arabica should see support at 102.50, then 100.25-100 cents, followed by 99 cents. Resistance would be at 110, then the session peak of 110.25 cents.

Volume traded reached an estimated 7,601 lots, against the official previous volume of 8,678 lots.

Call volume reached an estimated 2,011 lots, whilst puts were seen at 1,281 lots.

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