Coffee Futures Settle with Little Change by FC Stone

Arabica coffee futures settled higher on Tuesday, due to short covering during the last moments of trading. The most active contract for March delivery settled 25 points higher at 119.90 cents per pound. Volume was modest at 18,297 lots. Prices were under pressure in the morning, due to the sharp fall of the Brazilian real, however, lack of follow through  from  the  sell  side allowed  speculative  buying,  helping  prices  bounce  from  the  recent  lows.  The  Brazilian currency showed significant volatility once again. After morning  weakness, the real gained traction, supported by emerging  markets  anticipating  the  Chinese  economic  stimulus.  Nevertheless  the real  is  expected  to remain weak during the next few weeks due to weak economic figures and political corruption scandals. In related news, Colombia is considering implementing a stabilization fund for coffee prices. The decision could be made this week.
 
-The Brazilian government auction of 100,263 bags of Arabica coffee received no bids today. It has been rescheduledfor December 9, 2015.