Evening Coffee by Societe Generale

    On a background of concern over the crops of Brazil, Vietnam and Indonesia, New York coffee futures traded strongly higher for the second straight day today fueled by buy stops at sixteen-month highs in Dec16 futures, at nineteen-month highs on a second-month weekly basis. The rally began slowly at the opening of the active trading period (post 8 am NY time), adding about 2½¢ to yesterday's close, then accelerated shortly after the London market closed, adding the final three cents of the move in one three-minute period.
   December New York (KCEZ6) settled eighty percent to its high, up four cents. Volume was fifteen percent above average at an estimated 35,646 lots including an estimated 634 EFP's, 74 EFS's, 645 TAS and 9,671 spreads. 4,361 calls and 5,920 puts also traded. The KCEZ6-LRCF7 arbitrage: 64.95¢+1.28¢ . Ratio: 1.7246+0.0157. €: $1.1156-0.2%. BRL: 3.2527/$+0.6%. CRB: +¾%. Crude oil: +1.1%. S&P500:+0.1%. Open interest: 180,960+1,866.
    November London (LRCX6) settled in its lower half (36%), down five dollars . Volume was nine percent above average at an estimated 15,150 lots including 4,125 spreads and 1,665 EFP's. 3,200 calls and 1,678 puts also traded. Open interest: 110,445-916.
    ICE Europe reports that commercial traders were net sellers of 5,574 10-tonne lots of robusta coffee in the week ending September 13th increasing their net short position to a record 42,222 lots. Managed money was the biggest buyer at 3,952 lots, increasing their net long position to 36,078 lots - 1,993 lots shy of the record long position of 38,071 lots set on 7-August-2012. ICE Europe commitments of traders data goes back to October 2011.
    The European Coffee Federation estimates that coffee stocks in Antwerp, Bremen, Hamburg, Genova, Le Havre and Trieste rose 17,461 tonnes (2.4%) in June to 742,142 tonnes. The biggest increases were in Hamburg (+9,339 tonnes +7.4%), and Genova (+8,390 tonnes +7.8%). Stocks are 38,476 tonnes (5.5%) higher from 703,666 tonnes in store one year earlier. Hamburg was up 21.5%, Genova up 83%.
John Bernardi