In a fairly uneventful session, New York coffee rallied on the back of a weaker U.S. dollar (which traded to an 8-month low) breaking above yesterday's highs in the third hour of active trading. We sold off from there, trading to within thirty points of the early low and closing more than one cent below yesterday's high. A two-day pattern, stops will likely be placed below today's lows. Daily downtrend from April 21st high will be at 124.20¢ in Jul16 on Monday. First resistance midway between Wednesday's open and close, 123.70¢.
July New York (KCEN6) settled two-thirds to its low (33%), up fifty-five points. Volume was forty-four percent below average at an estimated 24,583 lots including an estimated 647 EFP's, 84 EFS's, 1,576 TAS and 6,869 spreads. 3,135 calls and 2,210 puts also traded. The KCEN6-LRCN6 arbitrage: 49.67¢. Ratio: 1.6896. €: $1.1451+0.9%. BRL: 3.4439/$+1.3%. CRB: +0.8%. Crude oil: +0.2%. S&P500:-1.1%. Open interest: 183,601+2,831 (50-day stochastic: 23%; 125-day: 46%). No notices were issued.
July London (LRCN6) settled near its high (90%), above yesterday's, up ten dollars. Volume was 146 percent above average at an estimated 44,833 lots including 6,869 spreads and 27,736 EFP's - 13,160 May16 and 14,568 Jul16 + eight others. 455 calls and 1,135 puts also traded. Open interest: 114,205+1,427 (50-day stochastic: 20%; 125-day: 22%). Daily uptrend from February 25 will be at $1566 on in Jul16 on Tuesday. Tuesday is first tender day for May16.
The International Coffee Organization reports that 10.388 mln 60-kg bags of coffee were exported in March, up one percent from 10.281 mln bags in March 2015. Colombian milds exports were up 29.9% to 1.208 mln bags, other milds down 10.5% to 2.229 mln bags, Brazilian naturals up 6.1% to 3.002 mln bags, robustas down two percent to 3.949 mln bags. That brings total shipments in the first half of the crop year to 55.461 mln bags, up 1.6% from 54.588 mln bags in the Oct14-Mar15 period.
CFTC reports that large speculators were net sellers of 3,688 lots of Coffee ‘C’ in the week ending April 26th leaving them net long only 1,807 lots. Large hedgers bought 2,364 lots cutting their net short position to 41,986 lots. Small traders bought 967 lots (long 6,216). Index traders bought 356 lots (long 33,963).
Monday, May 2, is a UK Bank Holiday. The London coffee market, and office, will be closed. The New York market opens late, at 7:30am NY time (1:30pm CET), closes as usual. Diego and I will be in the office and at your service.