Daily Coffee Commentary - June 9, 2021

Arabica fell for a third consecutive day, settling 159.30, -.55, while London declined $14 to 1582.  While the price action was negative, silver linings for the bulls were notable; Friday’s low held, as did trendline support off the early April lows, prices rallied back into settlement, a final print of 160.10 gives a launching pad for tomorrow morning’s trading, and another relatively low volume outright trading environment did little to suggest grudged trading of any magnitude.  Nonetheless a down day is a down day, and a 3rd day of inability to break 5.00 by the BRL was a noted cause of concern given the December reversal off similar levels.  Trader sentiment is notably sagging.  Day 3 of the index roll saw slight settlement improvement in structure as the past 2 day’s heavy turnover took a step back, N/U gaining 5 points to close -2.10, albeit in an equal -2.15 / -2.05 range to yesterday, and with a lower VWAP by the slimmest of margins, -2.11 from -2.10.  Tomorrow’s CPI numbers have been a point of focus from coffee traders on the chats, with Bloomberg reporting a consensus estimated for May of +0.4% MoM (0.8% prior) and 4.7% YoY (4.2% prior).  That data is set for release 8:30am NY time tomorrow.  Friday’s July option expiration is also a potentially pivotal event given the heavy positioning everywhere and cheap expiring protection for those positions.