Robusta coffee futures nudges down after firm start
Robusta coffee futures nudges down after firm start
LONDON (Reuter): Robusta coffee futures nudged lower by midsession yesterday after a firm start with values coming under renewed pressure from fresh origin hedge selling, traders said.
The fall was also exaggerated by the persistently low volume, they said. There was some scale-down roaster buying but this was later eroded by producer selling from Indonesia, one floor trader said.
Benchmark September was US$33 down at $1,765 a ton at the morning close after a $7 gain early in the session.
November also shed $30 at $1,750.
Volume totaled just, 1,009 lots. There was no real opening indications with the New York market closed for a national holiday on Friday.
Traders called the market to open one to two cents down. Chartwise, analysts said the market were likely to break out of a chart pennant to test the downside amid a lack of trading volume.
Trevor Neil, a senior technical analyst at Cal Futures, said coffee was about to break the chart pennant and that it should break on the downside.
Neil said the downside break point was $1,780 and then a target of $1,665 at least. An upside break would be a close above $1,855, which would give a target of $2,050.
"But the odds favor a break down," Neil said.
Broker GNI said Brazil's coffee regions would now be frost free through the middle of July based on latest weather forecasts.
"While there is still the possibility of a frost through to the end of August, the risks from here drop sharply," it said.
In other news, the International Coffee Organization (ICO) said producing members' exports reached 81.75 million 60-kg bags in the 12 months to May 1997, up sharply from 73.02 million in the same 1996 period.
In May, exports rose slightly to 7.03 million bags from 7.02 million in April. This compares with 6.60 million in May 1996. In the first eight months of the current 1996/97 (Sept/Oct) coffee year to May, total exports were up at 57.36 million from 50.11 million in the same 1995/96 period.