INTL FCStone Daily Coffee Report

Arabica Coffee futures followed a similar pattern to that of recent sessions, edging 30 points lower at 141.70 cents per pound for the March delivery contract. After opening 40 points higher, prices reached an early high, and consolidated lower in a relatively calm session. Participants await the incoming macroeconomic and fundamental events, with the EU interest rate decision tomorrow, and the Fed’s Interest rate decision the 14th of this month. On the fundamental side, Brazil crop estimates are expected this month, with IBGE’s crop survey tomorrow, CONAB’s final 2016-17 estimate on the 14th, and USDA’s biannual coffee report on the 16th. January option expiration on Friday will probably add some volatility, as speculators cover any open short positions with the respective futures. In addition, 500 lots of the Mar17 145.00 puts vs 145.25 with a 46% delta traded at 7.15 today.
 
London Market- The Robusta terminal drifted lower towards the psychological $2000 barrier, continuing to absorb roaster buying en route. With values little changed off the opening  bell, early strength in New York saw prices lift through the early part of the session, attracting scattered origin selling. Any moves higher, however, proved temporary, with the ‘C’ contract unwinding its early gains and pushing London lower into the hands of commercial buyers, which remained operational in good volumes. Nearby structure continues to attract attention and provided the bulk of the sessions volume, with over 7000 lots of the Jan/March traded as the funds roll residual long positions down the board. Options turnover was generated via the rolling of 1500 lots of the March 1950 put and March 2150 call into July.