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.