INTL FC STONE COMMENTARY FOR JULY 3/17

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Arabica Coffee Futures for September delivery settled 2 cents higher at 127.70 cents per pound. Prices began the session firm, with strong buying at the opening, pushing levels to the recent highs of 128.40 basis September. The market consolidated sideways early on the session, testing the 128.40 level twice until a wave of short covering helped prices burst though the resistance level, reaching a high of 129.50 cents per pound. Good volume accompanied the action, reaching 37,663 lots, including 7,160 switches. Friday’s COT showed the managed money sector increasing their net short position by 6,755 lots to 42,454 lots, while the commercial sector turned their net short position to a net long of 1,580 lots. In weather news, Brazil weather (Cropcast)Temperatures remain seasonal across the region, with no frost noted. Frost threats overall will remain low. Markets in Colombia are closed today, and US markets will be closed tomorrow. Wednesday minutes from the FED’s June meeting will be release. Traders expect a more cautious tone. Friday, non-farm payrolls are forecast to rise by 175,000 after a weaker than expected rise of 138,000 in May.  June unemployment rate expected 4.3%. The G20 will meet in Hamburg Friday July 7th-July 8th.
 
News from the states over the weekend that the latest CFTC Commitment of Traders Report showed the funds had actually increased their short position in the ‘C’ contract made for a steady tone in London as sellers backed away looking for higher prices. They weren’t disappointed – at least for the first part of the session as spec and trade buyers ensured the board flirted with nearby highs. The potentially friendly configuration was dealt a double blow however when the open interest was released showing yet another decline (taking total exposure down to 102,848 lots), swiftly followed by a London Commitment of Traders Report that revealed the funds had been actively liquidating longs over the last reporting period. New York’s push to fresh highs in the late mid-session was soaked up by the arbitrage moving back through 30 cents, London choosing instead to post an inside day.