ICE Coffee Futures Close Modestly Lower
Arabica coffee futures closed lower Monday on a session dominated by spreads trading. The active
contract for September delivery fell 110 points to settle at 121.15 cents a pound. With lack of news and external factors that could influence on the prices, the activity was mainly generated by short term specs. Weakness of the real also pressured the prices. The real weakened ahead of monetary-policy meetings in US and the European central bank. The real finished at BRL2.2666 from BRL2.2501 last Friday. The Commitments of Traders Report on Friday showed that non-commercial reduced the net short position to 23,009 lots as of July
23. The commercials increased to a net short of 35,023 lots. In other news, farmers in Colombia sued the government demanding from the government to end the prohibition to grow low quality coffees and to restrict
the import of coffees of low quality.
London was slow to get operational this morning with the board uncovering price fix buying support into the opening sequence. Selling was mixed but origin involvement was extremely light. The market is continuing to talk about reducing certified stocks and relatively high physical differentials as the driving fact behind
the Bullish undertone of the market. The September still held its premium around $6 throughout the morning with the flat price action consolidating above 1900. COT numbers for London did not yield any surprises with the Managed Money short being reduced taking the net working position down to just 265 lots, with the Commercial exposure continuing to release longs resulting in the net position down to 4,651 long. Over the week the board was down $15 with the open position cut back by 1,492 lots which linked well with the exit of positions. Robusta exploited weakness into the second part of the day with prices testing down to the 1880 pivot level in September which remains an important marker for any downside action. Prices lifted quickly with buying building in beneath the action helping the reaction from the lows. Structure recorded little change
with the September premium holding as the market focused on addressing exposure before month end on Wednesday. The board held the important levels despite the setback today which maintains the focus on the upside for the moment.