Most traders had expected stocks in September to be little changed from August levels, with forecasts ranging from a decrease of 150,000 bags to an increase of 100,000 bags. "On the face of it, it's not too surprising," said Refco Inc analyst Ann Prendergast. "But it has to be seen as a little bit encouraging because it does imply the high level of Brazilian exports is being absorbed." A sharp rise in September coffee exports from top-producer Brazil, to more than 2.0 million bags, had some members of the industry looking for a build in US consumer coffee stocks last month.

But many market participants said the drawdown in stocks was to be expectedahead of the start of the new-crop harvest in many Latin American countries and the peak North American consumption season.

"GCA is pretty neutral because people were looking for a drawdown," said Merrill Lynch analyst Judith Ganes. "If you look at the past several years, we've looked at declines in September." The port of New Orleans posted the largest decrease in coffee stocks during September.

New Orleans stocks fell by 124,000 bags to 460,000 bags, the GCA said. Inventories decreased by 35,000 bags, to 322,000 bags in New York. Warehouse stocks in Jacksonville, Florida also decreased in September, falling 12,000 bags to 140,000 bags. "Normally stocks come off this time of year," said one US broker, "but I think this could be a little supportive." However, other market sources noted CSCE coffee futures have posted gains the past three sessions and they said a stock decline may already be priced in the market.

They said talk on Thursday that a large trade house had expected September stock levels tofall more than 200,000 bags could prove disappointing for some market participants. "The market has gone up, so GCA may be a nonevent," said another broker. "Stocks did go down and it could be supportive, but there was a bigger number floating around today."