Daily Coffee Commentary - June 11, 2021

Arabica coffee futures for September delivery settled 120 points lower at 159.60 cents a pound on general  decline of the equity and commodity markets. Activity continued to be boosted by spreads trading. Volume  reached 79,511 lots, including 25,497 switches. The commodity complex was affected by the strengthened of  
the dollar, after investors factored the inflation figures as temporary and not affecting the FED policies. The  Brazil’s real weakened to BRL5.11, adding pressure on the coffee prices. According with local sources, Brazil’s  producers have sold 40 % of his year year average of 26%. Higher  prices in international and the local market have contributed to induce farmers to accelerate the sales of this  year crop, even establishing forward contracts up to 2023. Exports during May fell 20 % to 2.34 million 60-kg  bags from May 2020. Lack of containers affected the normal flow, Cecafe said. Participants will focus on next  week GCA US stocks report to be published on Tuesday.  
A subdued end to the trading week as values held the previous low but were unable build significant intraday  gains, ending the session only 0.5% higher. This saw july21 management take centre stage as the commercial  short were consistent buyers of spot structure sub $27 discount. Technically the market it’s trying to form a  baseline at $1600 basis Sep21 as longer-term upside dynamics remain intact. Heavy options volume registered  with 1,500 Sep21 1525/1425 put spread versus a 18% delta hedge at $1612 trading at $24. This is most likely  the non-commercial long willing to pay out premium to protect downside exposure amid delta management.