Evening Coffee by Societe Generale

London coffee leaped on its opening, trading as much as $59 higher as buy stops were triggered in a sparsity of selling. We gave back two-thirds of that gain into the New York market's opening then spent the rest of the day in a small range, trading back to three dollars higher. We mounted a rally in the last two hours, trading halfway back to the highs. The New York market opened above yesterday's high but fell one-quarter cent short of Tuesday's more significant high. We fell three cents off the high in the first two-and-one-half hours of active trading, May16 closing at its lowest levels since March 3rd. Spreading was heavy. The Brazilian real was sharply lower against the dollar after the ECB hinted at further easing.
    May New York (KCEK6) settled twenty points from its low (7%%), down 1.70¢. Volume was ninety-four percent above average at an estimated 81,284 lots including an estimated 535 EFP's, 6 EFS's, 2.284 TAS and 36,075 spreads. 5,491 calls and 6,421 puts also traded. The KCEK6-LRCK6 arbitrage: 52.37¢. Ratio: 1.7717. €: $1.1378-0.2%. BRL: 3.6896/$-1.3%. CRB: -0.4%. Crude oil: -0.6%. S&P500:-1¼%. Open interest: 197,242-717 (50-day stochastic: 73%; 125-day: 79%).
     May London (LRCK6) settled in its bottom half (41%), up twenty-six dollars. Volume was fifty-one percent above average at an estimated 24,741 lots including 8,668 spreads and 803 EFP's. 2,400 calls and 200 puts also traded. Open interest: 121,245-573 (50-day stochastic: 2%; 125-day: 41%).     
     The Brazilian Institute of Geography and Statistics (IBGE) raised its estimate for Brazil's 2016-2017 coffee crop to 50.2 mln 60-kg bags, 0.9% higher than their February estimate due to an improved outlook for the crop in Bahia. Arábica output is now seen at 39.2 mln bags (from 38.9 mln), conillon at 11.0 mln (10.8 mln).
John Bernardi