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CSCE coffee ends higher - specs, locals, trade buy

NEW YORK: CSCE coffee futures closed at its highest level in just under two weeks on Thursday, thanks to speculative, local and trade buying, with market talk about retention plans providing positive undertones.

Front months gained 3.95 cents each, with active May finishing at 105.85 cents a lb, trading from 106.25-103 cents.

Spot March closed at 105.10 cents, whilst July rose 3.85 cents to 108.15. The rest of the board climbed by 3.30-3.75 cents.

Arabica futures opened higher than traders' predictions as good roaster buying gave the market an initial surge, brokers said.

"Roasters were buyers in the morning session. They're just keeping pace with whatever they're roasting. They don't want to fall behind, but I don't think they're ever going to extend coverage at these kind of premiums," one broker with a major coffee house said.

Heavy trade and speculative buying took out a couple of layers of resistance and little origin selling at the top of the range allowed the market to press higher, traders said.

One broker said that they had seen good origin selling around the 104-105 cent level, but another New York based broker said they had seen nothing.

"I didn't sell anything for origin. I think this morning it was a little too quick and they didn't have the selling in there. They liked the way the market was performing so they kept it out," the broker said.

Traders and analysts said that overnight news concerning the Colombian coffee premium hike, coupled with rumours circulating in the market about Brazil's role in the ACPC retention plan, had also lent support.

"I think that is certainly giving the market some additional psychological lift," Arthur Stevenson, softs analyst with Prudential Securities said.

Colombia's Finance Minister Juan Camilo Restrepo said late on Wednesday that the so-called "quality premium" Colombia's coffee fetches on international markets was being increased by two US cents to 13 cents per pound, from 11 cents previously.

"But it's hard for me to get excited. You still see the Mexican's being offered cheap," one roaster told Reuters.

He added that the daily increases in US certified stocks would continue to weigh on prices.

Certified stocks increased to 1,174,637 60-kg bags as of March 1, against 1,164,537 bags previously.

On a technical basis, May arabica should see support at 100.25, then 100 cents, followed by 99 cents. Resistance would be at 109-110 cents.

Volume traded reached an estimated 10,699 lots, against the official previous volume of 7,074 lots.

Call volume reached an estimated 2,087 lots, whilst puts were seen at 715 lots.

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