Coffee Commentary for June 24th

ICE Coffee Futures Close Modestly
  Higher


  
Arabica coffee futures closed modestly higher Monday at the
  end of a quiet session. The active contract for September delivery settled at
  120.15 cents a pound after consolidating between 121.25 and 118.70 cents
range.   Volume declined to 13,738 lots.  Speculative short-covering
provided support to  the prices as the market bounced from the lows. 
Markets in general remained  distressed after last week FED announcement. 
In coffee related news, USDA  published estimate for 2013-2014 world crop at
146.0 million bags, a decrease of  4.4 million bags from previous
year.   Brazil production was forecasted at 53.7  million bags, down
2.4 million from 2012-2013.  Colombia estimate at 9.0 million  bags and
Central America and Mexico at 16.5 million bags.   In Brazil, the real
  closed firm against the US dollar at BRL2.2260 from BRL2.2406 last Friday.  
 
 
London: The market had a lot to consider
  regarding freight changes in July from Asia with increases of some 30% being
  reported which indicates that it will cost towards $1000 per box to ship coffee
  out of Vietnam next month. We have a week before first notice day for Robusta
  and the open position in July  was carrying almost 17,000 lots entering
today’s  business so we have a lot to address over the coming days. Robusta COT
numbers  showed the Managed Money long towards unchanged over the last week
which was not  what the market was expecting considering the fact that the board
was $60 lower.  Ideas were placing the fund towards 12,000 short in the numbers
as against  9,671. More volatility trades boosted the option turnover into the
afternoon  which generated some buying of futures. The market was lacking the
presence of  origin which allowed a lift in level’s but the board made hard work
of the move  giving ground back into the afternoon as the market spent time in
addressing the  spot month ahead of the delivery period starting next week.
Exposure in London  was down 1,312 lots leaving a net open position of just
below 110,000. The  reaction in prices was enough to change the momentum of the
market slowing the  algo style sellers into the afternoon allowing the market to
settle towards the  highs of the session.