Coffee Futures dive under 150

Commentary from Int'l FC Stone for November 13

Arabica coffee futures plunged today as
  speculative and commercial selling pressured the prices. The nearby contract
for  December delivery lost 705 points or 4.61%, the lowest level since June
2010.  The fall got more momentum as the prices broke the recent lows and
appeared to  test new lows.  The action disappointed long players after
yesterday’s bounce  had fueled some bullish ideas, and they were anticipating a
continuation in  today’s session. However the sentiment ended as prices
collapsed. The reduction  of the open interest evidenced the short covering. The
open interest declined  1,502 lots as of yesterday, to 142,539 lots.  The volume
was boosted by  switches. The nearby December switch finished at 5.20 cents
after trading 16,204  structures. 


 


In London, the Robusta market closed
down  following the New York action.  Volume had been an increasing issue for
Robusta  over the last few sessions with daily turnover numbers steadily
wilting, even as  the market picked itself up off of the lows. The fact that
volume was not  increasing in-line with the strength should have been a warning
sign for those  willing to join the upside swing. And so it came to pass: the
market’s inability  to breach the intermediate moving averages yesterday coupled
with fresh macro  doubts on Europe saw a steady mix of liquidation and fund
selling slowly erode  what light industry and trade bids that were in existence
under the market. As  the buying started to thin so New York came under
pressure, creating an almost ‘perfect storm’ for the new short sellers, who were
by now becoming very active.  All over again the board started to look very
comfortable in weakness as  momentum shifted into another gear for the close.
Sell stops added to the  pressure in the final minutes ensuring a breach of the
$1900 mark and a  settlement on the lows.