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Coffee settles lower

NEW YORK: CSCE arabica coffee settled lower after fund long liquidation took the active futures to one-month lows, traders said, while the backwardation that had put May futures at a premium to July was reversed.

"All the signs are that the (supply) tightness is easing," said Refco Inc analyst Ann Prendergast, adding that the lack of fund buying interest and only modest roaster interest suggested the market was due for further losses.

Most-active May ended off 1.70 cents at 113.55 cents a lb, traded from 115.40 to 111.00. July ended 1.00 lower at 114.10, while the back months closed 1.30 weaker to 0.95 firmer.

Volume was estimated at 12,057 lots, up from Thursday's official turnover of 9,042.

May coffee managed a modest bounce from expected support levels as locals covered short positions, although many market sources expected another near-term test of key nearby support at 110.65 to 111, which was tested repeatedly in early March.

Traders said they would be watching the London market Tuesday for follow-through selling as traders there return from a four-day Easter holiday.

CSCE warehouse stocks data released after the close showed a slight drop of 4,486 bags to 149,198 in the week to April 5.-Reuter