DJ ICE Coffee Review: Dec Falls 1.3% On Speculative Selling

Arabica December coffee on ICE Futures U.S. lost 1.3% Wednesday, pressured by a firm U.S. dollar versus the Brazilian real and overall commodity weakness. Most active December coffee on ICE Futures U.S. lost 175 points to settle at $1.3460 a pound, near the middle of the day’s trading range.

A lower equities market combined with the firm greenback fueled speculative selling interest in commodities, taking most markets lower, brokers said. The market also encountered follow-through selling linked to five straight sessions of losses, one that saw December coffee fall to a three-week low of $1.3295 during the session.

Coffee futures may be content to range-trade, however, unless the U.S. dollar or stock market trades dramatically one way or another. « For now, I’m looking for coffee prices to stay in a range between $1.3250 and $1.4000, » said Boyd Cruel, senior softs analyst at Vision Financial Markets in Chicago.

However, Wednesday’s close in December coffee below $1.3500 signals a test of support at $1.3360, said Veronique Lashinski, analyst with Newedge Group. A close below $1.3360 would signal a decline toward $1.3000 then $1.2710 and $1.2550 a pound, Lashinski said in a research note.

Honduras has export contracts for 31,891 bags of coffee from the new 2009-10 crop through Oct. 25, down 2.1% compared to the same time last year, the official Honduran Coffee Institute said. Honduras is a late seller in the market, with new-crop sales normally not starting in earnest until after the onset of picking in late October. ICE warehouse stocks fell 5,893 bags to total 3.292 million 60-kilogram bags, the exchange reported.

Source : FutureSource