Coffee futures rallied as a scattering of modest supply concerns, from Brazil to Indonesia, prompted hedge funds to take profits on short bets - which data revealed they had increased at a record pace.
Arabica coffee futures for July jumped 2.9% to 129.80 cents a pound on New York's ICE exchange, while in London, July robusta coffee futures for July soared 4.1% to $1,699 a tonne.
The gains accelerated a recovery from lows last week, when arabica coffee hit a 14-month low, on a spot contract basis, and robusta coffee futures an 18-month nadir.
And they were fuelled by some data which prompted hedge funds to consider taking profits on a net short position in arabica futures and options which regulatory data showed was, at 18,682 lots as of last Tuesday, the highest since December 2013.
That followed a record week for bearish positioning on arabica coffee futures and options by hedge funds.
Extreme speculative net short, or net long, positions can spur a retreat, in raising concerns over the appetite for more such holding.
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