Arabica coffee futures settled higher on Tuesday, due to short covering during the last moments of trading. The most active contract for March delivery settled 25 points higher at 119.90 cents per pound. Volume was modest at 18,297 lots. Prices were under pressure in the morning, due to the sharp fall of the Brazilian real, however, lack of follow through from the sell side allowed speculative buying, helping prices bounce from the recent lows. The Brazilian currency showed significant volatility once again. After morning weakness, the real gained traction, supported by emerging markets anticipating the Chinese economic stimulus. Nevertheless the real is expected to remain weak during the next few weeks due to weak economic figures and political corruption scandals. In related news, Colombia is considering implementing a stabilization fund for coffee prices. The decision could be made this week.
-The Brazilian government auction of 100,263 bags of Arabica coffee received no bids today. It has been rescheduledfor December 9, 2015.