Falling forty points short of yesterday's high in the early going, New York coffee drifted lower through the first two hours of active trading, taking out yesterday's low by one tick. We rallied back over the next hour+ to within forty points of the early high only to sell back off to close near the early low, below the August 4th low (head-and-shoulders top?) and at the lowest closing level since June 27th. Spreading again represented a good portion of the day's volume, although the total volume was less than half yesterday's. Sub-freezing temperatures near Brazilian coffee areas likely kept the market from falling further.
September New York (KCEU6) settled in its lower quarter (18%), down eighty-five points. Volume was eight percent below average at an estimated 37,715 lots including an estimated 541 EFP's, 4,204 EFS's, 416 TAS and 12,268 spreads. 3,456 calls and 3,781 puts also traded. The KCEU6-LRCU6 arbitrage: 55.42¢-½¢. Ratio: 1.6776-0.0042. €: $1.1162+0.2%. BRL: 3.1839/$-1¼%. CRB: +0.4%. Crude oil: +2¼%. S&P500:-0.1%. Open interest: 185,723+415 (50-day stochastic: 56%; 125-day: 52%).
September London (LRCU6) settled three quarters to its low (25%), down five dollars. Volume was forty-eight percent below average at an estimated 7,272 lots including 1,871 spreads and 294 EFP's. 1,300 calls and 1,150 puts also traded. Open interest: 109,017+1,150 (50-day stochastic: 100%; 125-day: 27%).
CFTC reports that large speculators were net sellers of 3,199 lots of Coffee "C" in the week ending August 9th (leaving them long 29,699). Large hedgers bought 2,014 lots (short 70,254). Index traders bought 611 lots (long 33,300). Small traders bought 575 lots (long 7,255).
A few of the traditionally coldest locations near the southernmost border of Sul de Minas with São Paulo dropped slightly below freezing this morning. These coldest temperatures were near coffee production areas, although were isolated incidents and not representative of the majority of coffee country...Saturday morning temperatures will be similar to those of today with the majority of coffee areas not threatened by the cool conditions. World Weather, Inc.