The New York Board of Trade's (NYBOT) active March arabica contract rose 0.80 cent to end at $1.07 per lb., the highest settlement for the benchmark delivery since November 11 when it ended at $1.1085.
"It was more of the same thing we saw yesterday just some speculative buying touching off light commission-house buy stops," said a trader, referring to automatic buy orders when prices penetrate key technical barriers.
"The industry was out of the market and origin sold on a scale-up basis," he added. Among other arabicas futures, the May delivery advanced 0.80 cent to settle at $1.0910 and more distant months gained 0.80 to 0.90 cent.
Speculators have helped drive up arabica futures just over 5 percent this week, but managed-money funds have yet to show any force. "There is no quality buying around.
The only buying is by small specs, and you don't see funds really going long here," said Rodrigo Costa, a vice president at Fimat USA. "If we go through $1.15, then we will start to see some fund buying," he said, pointing to bullish fundamental and technical signals.
Prices have been underpinned by flagging crop production from leading coffee grower's Brazil and Vietnam during the 2005/06 season. Yet, recovering crops in Brazil and Vietnam could result in a small coffee surplus in the 2006/07 season after a 7-million 60-kg bag deficit for 2005/06, the International Coffee Organisation said in a report issued this month.
Estimated trading volume in NYBOT arabica futures amounted to 10,469 contracts, down from the 12,977 lots officially tallied the previous session.