INTL FCStone Daily Coffee Report

Arabica coffee futures traded lower throughout the session, with the May delivery contract falling 105 points at 143.30 cents per pound. Activity was rather slow, as prices slowly edged lower. Technical weakness in yesterday’s activity prompted selling. Volume reached 25,831 lots, including 4,037 switches. During the week, coffee prices experienced significant volatility. The may-delivery contract fell 3.05 cents, or 2%. After beginning the week by losing 515 points on Monday, prices found strong support below the 140.00 level, which helped push prices up to the 20-day moving average. Lack of follow-through in the movement and technical weakness pressured prices, towards the end of the week. Brazil was partially active during the week, out for Carnaval during Monday, Tuesday, and half of Wednesday. In related news, the ICO published global export figures for the month of January at 9.84 million bags, 6.7% higher than in January of 2016. Technical support is now noted at 140.00 and 135.20, while resistance can be found in 146.90 and 152.30 for the May-delivery contract.
 
London operated a $16 range through the session,  with values content to hold around the $2200 for much of the day.
Prices immediately opened $15 lower off the opening bell, adjusting to final hour weakness in New York yesterday evening and accentuated by  a lack of resting buy orders following the yesterday’s aggressive move higher. Reasonable clips of Asian origin selling were present through much of the duration of the day, maintaining a lid on the market as upward momentum failed to establish. With the ‘C’ contact unfolding in a sideways motion, London held a narrow range for the duration of the session.  
 
Decent volume was generated via the options area, as participants sought additional upside cover. The May 2200 call traded 500 lots alongside a 50% delta at $2200 while 400 lots of July 2250 calls were traded with a 48% delta at $2210.