INTL FCStone Daily Coffee Report for July 6/17

Arabica coffee futures for September delivery settled 230 points higher at 130.00 cents a pound supported by the technical picture, Wednesday.  Volume reached 30,473 lots, including 3,803 switches.  The active September -December switch remained at -3.40 with good interest buying underneath.  The technical action exceeded other typical factors that usually put negative pressure on the prices.  The dollar was firm and the commodity complex declined.  Crude oil lost 4.19% to $45.13 per barrel.  Cocoa fell $11 to $1,947 and sugar 25 points to 13.67 cents a pound. Volatility returned to the currencies.  Real ended 134 points higher at USDBRL3.2961, after trading up to USDBRL3.309. The Colombia peso devaluated COP38.2 to USDCOP3,084.0.  Weather in Brazil was cold across the region but no frost was noted.  Temps are expected ranging from the lows 40s to low 60s, with cooler areas in the northeastern. (Cropcast).  After the close, FED minutes were released.  Officials confirmed they are ready to start winding down portfolio within months.  US GDP growth forecast modestly faster for 2017, 2018 and 2019. Unemployment rate to continue declining over next two years.
 
A relatively gentle session in Robusta saw values unable to match gains in the U.S. market, reflective in the arbitrage widening 2 cents. Defying heavy weakness across the commodity complex, values opened marginally lower swiftly uncovering buying which drove levels through the previous high @ $2152. However, consistent Asian pressure resting on a scale basis above $2155, saw the early gains capped and participants move into a holding pattern below $2060 for the remainder of the session, fearing further action from the delivery process. The pace of notices slowed overnight with only 40 originals reported, drawing the total to 1,562 lots. July17 exposure still stands at 6,167 lots which encourage structure to hold a premium down the board july17/sep17 $35 and sep17/nov17 $17. Options generated heavy turnover with 1,000 Sep17 2000 calls verses 80% delta trading @ $179. (Buying 1,000 sep17 2000 calls/ Selling