Arabica Coffee Futures consolidated lower on Monday. The most active contract for March delivery settled at 119.90 cents per pound, losing 130 points. Volume reached 28,519 lots, including 5,531 switches. After opening 10 cents lower at 121.10 cents per pound, prices were pressured by weak emerging market currencies and an overall negative sentiment in the softs commodities complex. The Brazilian real closed at BRL 3.8734 and the Colombian peso closed at COP 3,350.50. Throughout the day, Arabica coffee prices edged lower, breaking through technical support levels, yet were able to recover most of the day’s losses in the last few minutes of the session.
Last week’s COT report showed the non-commercial sector covering over 10,000 lots, taking the speculative working position to 14,784 lots net short. Commercial participants liquidated over 3,500 longs and added 7,669 shorts, taking the net position to 14,878 net shorts. It is interesting to see how both the non-commercial and commercial sectors have a similar net short position of around 14,000 lots. Such shorts
are offset by Index traders, with a net long position of over 26,000 lots, and non-reportable participants.
GCA inventories will be published tomorrow, which might have added pressure to today’s prices. Last year GCA inventories decreased over 300,000 bags during the month of November, while the 5 year average is a decrease of 150,000 bags. October’s reported GCA figures were of 5,948,228 bags, quite close to the 12 year high from August. Failure to show a significant decrease in GCA inventories for the month of November in tomorrow’s report might have a negative impact on prices, suggesting slowing demand.
We begin what can be a volatile week reaching new monthly lows of 117.90 cents per pound. The Fed is scheduled to announce their decision on interest rates on December 16 th . CONAB will publish the 4 th estimate of the 2015 crop on December 17 th at 6:00am EST, and the USDA will publish their bi-annual Coffee Attaché Report on December 18 th .