December 08th, 2014

ICE Coffee Futures Fall on Speculative Selling

Arabica coffee futures continued to fall Friday on speculative liquidation. The most active contract for March delivery settled 245 points lower at 180.10 cents a pound. The volume increased to 24,786 lots , including 6,718 switches. The drop accelerated as the market broke the 180 level, for the first time since July 23. Forecast of rains for the Brazilian growing areas and the index rebalancing of the funds that will take place in early January encouraged the spec action. Index funds will reduce on more than 5,000 lots their open position due to the high coffee prices, they announced last October. During the week, coffee prices decline 7.35 cents or 3.9%. In addition to the rains in Brazil, the devaluation of the currencies( real 0.8%, col 7%) and the drop of the commodity markets added pressure on the coffee prices.
London Market - In London today, the Robusta market closed $10 lower. The activity was dominated by spread trading as traders anticipate further widened of the structure. The active January March ended at -$14, the lowest level since January 17. The market has been during the last 60 days inside a $100 range between $2,100 and $2,000, discouraging speculative participation. In economic news, the dollar climbed to the highest level of the last five year as US jobs added the most in two years.


Source: INTL FCStone