Arabica coffee futures lost terrain Monday on speculative profit taking. The active contract for March delivery
settled 195 points lower at 122.45 cents a pound. The activity was slow reflecting the holidays. Volume decreased to 16,098 lots, including 1,581 switches. Since the opening the market was under pressure following the Friday’s last hour performance. A strong dollar and the weakness of global commodities induced the liquidation of long positions. The real declined slightly, trading at BRL 3.7337 at 3:00 pm EST. The COP was steady at COP3,073. Rains continued to develop in Brazil with ample coverage during the weekend. Accumulations totaled 30 to 50 mm, with some areas reporting up to 100 mm. Rains are expected to increase during the next 3-4 days. In related news, Rabobank increased the estimated deficit in 2015/16 to 2.7 million bags from a previous of 1.9 million bags. The preliminary estimate for the 2016/17 harvest is 58.0 million bags. The current situation and the index fund rebalancing could push prices beyond 130 in the first quarter, Rabobank added.
USDA Vietnam 2015/16 Output revised up to 29.3 million bags from 28.6 previous.