Evening Coffee by Societe Generale

    After taking out yesterday's highs at the end of the first hour of active trading, New York coffee fell 3½¢ over the next two hours before running into a block of buying just under one-half cent above yesterday's low. We closed below yesterday's opening today after opening higher - a bearish engulfing day in candlestick jargon, to be confirmed by a break below today's low. Jul16 London closed near its low after taking out yesterday's high and would look negative below today's low.
     No tenderable notices were issued against Jul16 KC on today's first notice day.
    September New York (KCEU6) settled nearly three-quarters to its low (28%), down 1¼¢. Volume was fifty-one percent below average at an estimated 22,508 lots including an estimated 811 EFP's, 21 EFS's, 224 TAS and 5,276 spreads. 5,417 calls and 5,252 puts also traded. The KCEU6-LRCU6 arbitrage: 61.50¢. Ratio: 1.7938. €: $1.1305+0.6%. BRL: 3.3793/$+1.0%. CRB: -0.8%. Crude oil: -2.1%. S&P500:+0.1%. Open interest: 174,909-3,311 (50-day stochastic: 0%; 125-day: 11%).
     September London (LRCU6) settled one dollar from its low (6%), down seven dollars. Volume was twenty-one percent below average at an estimated 14,304 lots including 4,364 spreads and 206 EFP's. 520 calls and 950 puts also traded. Open interest: 104,399-731 (50-day stochastic: 23%; 125-day: 7%).
     Nicaragua exported 293,828 60-kg bags of coffee in May, up 12.1% from the same month in 2015, coffee-export center Cetrex reports. That brings the total shipped in the first eight months of the crop year to 1,235,957 bags, up 32% from the Oct14-May15 period.
     The La Niña weather phenomenon forecast to develop later this year (50-75% chance) will not be as strong as that of 2010-12 the Australian Bureau of Meteorology predicts. During the 2012 La Niña, excessive rains in Colombia led to the spread of coffee fungus (la roya).
     The UK votes tomorrow on whether or not to leave the European Union. Polls close at 10pm GMT (5 pm NY). The result of the vote should be know between 4am and 6am GMT (11pm to 1am NY time). The coffee markets should not be particularly affected by the vote as both are dollar-based.
John Bernardi