Arabica coffee prices rose Wednesday on ICE Futures U.S. in moderate activity and remained within the range of the previous day, when four-month highs were touched. Speculators rolled out of ICE March and into May before the notice period starts in three weeks.

The March contract settled up 60 points at $1.2250 a pound, with May gaining 60 points to $1.2470.

“We’re up with other commodities and the Dow, while the dollar was weaker this morning,” a New York desk trader said. “The market was quiet ahead of the Fed’s interest-rate announcement this afternoon.”

The Federal Reserve left rates unchanged Wednesday and said it was prepared to buy Treasury debt if needed.

ICE futures volume at 2 p.m. EST was estimated at 7,467 lots, and in options 3,555 calls and 920 puts traded, the exchange said.

At mid-morning, a New York desk trader said “we haven’t taken out the recent high, though that could happen. But one of these days we’ll have to retrace” to the downside.

Strong Colombian and Central American premiums relative to ICE are the market’s most supportive factor. Meanwhile, however, Brazil and Vietnam are selling from their bumper harvests.

“We’ve been hearing of Colombian defaults on contracts recently, though I haven’t seen it personally,” said Don Schoenholt, president of Gillies Coffee Co. in New York. “Since Colombia’s been shipping less, Central American exporters are asking for higher prices and they’re also withholding coffee. The New York market would be higher but Brazil’s shipped a lot” from the big harvest that ended in September.
Specialty roasters who don’t want to pay Colombian and Central American premiums are now buying the higher-quality beans that Brazil started selling 10 years ago, Schoenholt said.

Brazil from Jan. 1-27 exported 1,460,590 60-kilogram bags, lagging a substantial 2,066,395 in the same December span, the Green Coffee Exporters Council said.
Vietnam’s industry is on holiday all week to celebrate the start of Lunar New Year.
Starbucks Corp. (SBUX) plans to report fiscal first-quarter results late Wednesday.
ICE March finds support at $1.2090, $1.2075, $1.2050, $1.2035, $1.2025 and $1.20, with resistance at $1.2275, $1.2290, $1.23, $1.2340 and $1.2350.

ICE Change Range at 2:40pm ET Liffe Change
Mar 122.50 up 0.60 120.90-122.75 Mar 1720 dn 8
May 124.70 up 0.60 123.25-124.85 May 1726 dn 4 (Dow Jones)