DJ ICE Coffee Review: Firms Slightly; Eyeing Honduras, Brazil

U.S. coffee futures ended at slightly firmer levels Monday, after quiet, consolidative trade. ICE September coffee closed up 105 points at $1.2025 a pound. News of a Honduran military coup over the weekend has failed to significantly impact the coffee market for now. Analysts and traders downplayed any potential impact on coffee prices, but traders said they will continue to monitor news out of the country.

Honduran coffee exports are already running 10% behind the year-ago pace andcould face further delays amid the political uncertainty. Large volumes of Honduran 2008-09 coffee are awaiting shipment from ports as well as from rural areas in producing regions. Coffee exporters said that night work at ports had been halted by the curfew imposed in the wake of the coup.

Honduras is one of Latin America’s five largest producers of top-quality mild washed arabica beans. Looking at Monday’s New York price action, one physical coffee trader said: « We haven’t had much going on today. »

Looking ahead, however, the trader said weather news out of Brazil could be key to watch. « If forecasts for cold temperatures were to emerge in the Brazil coffee-growing regions, that could be supportive, » the trader said. Brazil’s main coffee-producing regions will be frost-free in the coming days, according to local weather service Somar.

In Guaxupe, in southern Minas Gerais state, temperatures are forecast to vary from a low of 9 degrees Celsius Monday, rising to 13 degrees for the remainder of the week, according to the weather service. Temperatures in Poco de Caldas, also in southern Minas Gerais, are forecast to vary little from 10 degrees Celsius Monday to a high of 11 degrees Tuesday.

ICE futures volume was estimated at 8,531 lots, and in options 1,008 calls and 821 puts traded as of 1:30 p.m. EDT, according to the exchange.

     ICE             Change             Range
   July     $1.1785           +110          $1.1665-1.1880
   Sep      $1.2025           +105          $1.1850-1.2170

Source : FutureSource