·ICE Arabica futures March contract opened 15 points lower at 150.55 cents a pound
and is currently trading even lower at 148.50 cents, after making a new low of 147.80. ·LIFFE Robusta futures January contract opened 5 points lower at $1,854 a ton and is currently trading even lower at $1,840, after making a new low of $1,836. ·Support from the robust opening of the US shopping season has buoyed Asian stock markets this morning. ·Colombia will increase subsidies for coffee growers from 11 dollars per 125 kg load to 33 dollars, effective when the price drops below 357 dollars. ·Spain’s cohesion will be an issue for implementing austerity measures with Catalonia voters electing separatist parties. ·European stock markets are mostly unchanged ahead of Euro finance ministers meeting to strike a deal on Greece’s next loan.. ·Israel and Hamas are holding to their truce, and oil is down on Monday.
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Tropical Report™ By: Eric Nadelberg, Consulting Analyst This Day in History: GM Produces 50 Millionth Car - 1954 The coffee market was a bit heavy today, it must have been all that turkey yesterday, as it made the day’s high just ten minutes into the early morning session, and had its best rally of the day after making the session’s low at 11:30 AM on a 1:00 PM market closure. The opening was at 153.00 (-45) and prices rallied to the day’s 153.85 (+40) high by 3:40 AM. From there it was a steady march lower, broken only by the occasional light and short-lived cover rally. But trend was intact and actively influencing the activity. It appears that the belief of a 130.00 or lower market is becoming conventional wisdom, as more than a few traders noted that 130.00 price as a level the see prices sinking to. That does make me a little nervous, although I hold the same views. I just don’t like so much company inside the boat so to speak. A late year rally seems possible, the market is very short and there are those well-advertised 10,000 lots of fund rebalancing to be done. But looking out into the distance, there’s coffee, coffee, and more coffee available. Until there are changes in roaster buying patterns, enough of that coffee will end up as inventory and not roast and ground, that the dynamic is going to need some real wrenching changes before the trend of increased robusta usage is arrested. When the lows were in the market was able to rally back to trade 151.00 (-245) by 12:40 PM, but the market settled back to close at 150.80 (-265) with the rump session finishing at 150.40 (-305) on the day. Volume was a post-holiday no one really cared 8,466 lots, where 136 lots traded in Dec and 7,051 lots traded in March. There were 950 spreads traded, of which 133 lots were Dec/Mar that traded between -900 and -805 settling at -865 (unch.) Jan options traded sporadically with no particular pattern. March was pretty much the same, with some random trades in deep out of the money calls. The market was quiet but the close was a new contract low close at 150.80, and that tells you all you need to know. Coffee remains bearish with more downside to go it seems as there aren’t many signs a bull can point to except that the market is currently rangebound. But with no sustainable lift showing, it seems a matter of time before this range is broken and the market basis March starts closing in the 140’s as well. Of course the market is closing and trading well; below key moving averages with a close back above 156.23 (as of tonight) needed before any thoughts of covering some of the position enter into the equation. |
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