Daily Coffee Report for Nov.14th

ICE Coffee Futures Consolidate Higher

 

Arabica coffee futures consolidated higher this Friday on concerns of the development of the 2015/2016 Brazil crop. The most active contract for December delivery, settled 325 points higher at 191.85 cents a pound.  Volume reached 54,576 lots on sizable activity in the spot December-March switch which widened to -4.45. “C” futures traded in a narrow range of 440 points, reaching a high at 193.40 and a low at 189.00, which was the opening price for the session.  In related news, according to the latest data from Brazil-based Safras e Mercado, 61% of the 2014-2015 Brazil coffee crop has been sold by the end of last week, higher than the 49% that was sold by the same time last year and the 56% five-year average. Brazilian producers sold 29.75 million bags out of the estimated 48.9 million bags, according to the report. It was also noted that there was a slowdown in coffee sales in the second half of October. In other news, LIFFE certified robusta stocks have risen again, gaining 2.1% to 12,291 lots from the 11,995 lots two weeks ago. This increase continues to build in volume seen since April 2014. The stock level is now 152% above the year-ago level of 4,877 lots.

London Market - Robusta took advantage of the technical move yesterday and push to new highs in early trading. Strength did uncover origin selling into the January which controlled the action into the morning. London certified stocks reported an increase of 249 lots to a revised position of 12,291. The trend continues but the current flow of grading is below expectations. General stocks around Europe have been increasing slowly over the last few months but still don’t reach expectations which immediate indicate we are receiving plenty of coffee moving directly into roasting which maybe explains the slow response on Robusta demand since the summer. We recorded an important increase in the exposure for Robusta yesterday with a jump of 2,391 lots. The principal change in January was up 1,151 lots which made a strong suggestion we did managed to pull in longs which narrowed the structure. The revised open position stands at 104,504. Options were active with almost 7,000 lots traded which primarily revolved around calls in January and March the main volume was in  March 2200 Combo’s. Arbitrage was evident into the afternoon with the New York premium widening as the March premium edged back above 103 cents.   The market completed a break to the upside moving above the first upside trigger of 2050 in January turning technical indicators higher to encounter the first phase of origin selling.