After an eleven-day rally that took the market up nearly two-hundred dollars, London coffee finally succumbed to heavy selling from Vietnam. We sold off from a one-year high to close below the middle of yesterday's range - a dark cloud cover in candlestick jargon, likely signaling a short-term market top. New York coffee fell nearly five cents from a thirteen-month high, finding support near the middle of yesterday's range. Negative action, though not as weak as London's. We would need to break below today's low for confirmation of a near-term top.
September New York (KCEU6) settled near its low (12%), down 1.90¢. Volume was twenty-five percent below average at an estimated 30,758 lots including an estimated 1,065 EFP's, 112 EFS's, 785 TAS and 6,381 spreads. 4,467 calls and 5,819 puts also traded. The KCEU6-LRCU6 arbitrage: 65.12-1.29¢. Ratio: 1.7936-0.0069. €: $1.1065+0.1%. BRL: 3.2906/$+0.6%. CRB: +1.9%. Crude oil: +4.8%. S&P500:+0.8%. Open interest: 178,270+2,889 (50-day stochastic: 29%; 125-day: 22%).
September London (LRCU6) settled near its low as well (19%), down twenty dollars. Volume was thirty-eight percent above average at an estimated 23,724 lots including 7,896 spreads and 715 EFP's. 305 calls and 475 puts also traded. Open interest: 101,445+1,356 (50-day stochastic: 27%; 125-day: 10%).
ICE Europe reports that commercial traders were net sellers of 8,673 lots of robusta coffee in the week ending July 5th leaving them net short 22,058 lots. Managed money increased their net long position by 4,934 lots to 16,709 lots. Other reportables bought 2,007 lots leaving them long 7,787. Non-reportables increased their long position by 1,262 lots to 3,289. Swap dealers cut their short position by 470 lots to 5,728.
A truckers strike may cut Colombia's July coffee exports by nearly half, to as few as 600,000 60-kg bags, federation head Roberto Velez told Reuters.