Coffee futures fall following new highs

Coffee futures fall following new highs

LONDON (Reuter): LIFFE robusta coffee futures retraced by midsession yesterday after a wave of fund and industry-led buying in the past few days fizzled out.

Traders said scale-up origin selling, notably from Indonesia, also hammered prices. Some Indonesian sellers were away on Thursday due to a local holiday.

However, further roaster support at the lows helped slow the slide.

Benchmark July hit a new eight-week high of $1,793 a ton in mid-morning but lacked further momentum to vault above the psychological $1,800 mark.

By midsession, the most-active contract stood $20 down at $1,760. The market was due to gap $25 higher but July managed to open $7 up.

Technically, July faces a stiff resistance at its life-of- contract high of $1,820. But support is seen intact at $1,700. Volume was a low 1,954 lots, centered on July position.

Traders said the market's prospects hinged on renewed fund buying.

"Without any fund support, the market will probably hang around here or turn softer," said one.

The rally earlier this week encouraged Vietnamese producers to unload their stocks, traders in Vietnam said. But there are only 20,000 tons of coffee left from the current crop after some 270,000 tons sold so far.

Vietnamese prices were quoted at $1,460 a ton FOB Saigon on Thursday, up sharply from $1,360 earlier in the week.

In other news, Brazil portworkers, as expected, returned to work at Santos on Friday. Traders had said the 24-hour stoppage would be short-lived and would have no disruption to coffee shipments.

Midday options volume totaled 440 lots.