MILANO – Arabica coffee futures reversed the trend Friday to finish lower on origin and speculative selling. The most active contract for July delivery declined 345 points to settle at 144.45 cents a pound.
Arabica coffee futures: what about the prices
Prices advanced early on speculative buying; however origin selling and lack of follow-through after posting new highs encouraged specs to reverse positions.
In related news, Brazil exports during April reached 2.7 million 60 kilo bags, 5 % higher than March and 35 % higher than April 2012, according with Cecafè. During the week, Arabica prices gained 3.45 cents or 2.44% on an action caused mainly by short-covering.
A constructive technical outlook
In addition to the arrival of the first cold front to the main growing areas in Brazil prompted the short-covering. The possibility of additional measures to help the coffee sector in Brazil, following the raise of the minimum reference price added expectations amid producers helping the rally as well.
The minimum price was finally increased to BRL307 per 60 kilo bag for Arabica coffee. Conillon minimum reference price remained unchanged.
London opened the day under pressure
It came from overnight hedge selling but coped with the early downswing well, bouncing sharply back to the highs of the day following the initial exchanges.
From there on intra-day volatility took something of a knock as the board consolidated into the upper end of yesterday’s range. Additional fund buying did materialise into the afternoon but seemed muted compared to yesterday. (possibly because the balance of the complex was in negative territory).
Having made a new high the market simply ran out of friends and slipped into reverse.
Underlying bids were quickly taken out
As volume rose sharply to the downside. From there on buyers were hard to come by and the market was left to end the week looking (and feeling) a lot less positive that it had done just 24 hours before.
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