Evening Coffee by Societe Generale

     Crude Oil dominated the attention today with an above estimated build up of inventories in the US that was shadowed by the huge fall of Gasoline inventories. WTI has a key reversal rallying 4.02% - the strongest move in three weeks. Private ADP Employment change, a preliminary gauge for Friday’s NonFarm Payrolls, came out with gains of 179k jobs in July, above the 170k. Equities in both side of the Atlantic were able to recover from earlier losses with the S&P500, Dow Jones and Nasdaq settling higher on the day. The Bank of England is expected to cut interest rates on its meeting tomorrow.
      Arabica prices closed at its lowest level since June 28th, the day it had a spike after trading at 134.80 on June 27th. Spread activity is taking the center stage with the U6/Z6 switch weakening to -3.45cts, a divergent signal that could eventually attract some fund liquidation if the market does not hold current outright levels.
      Robusta consolidated closing at the middle of today’s range also negotiating mostly spreads, with the U6/X6 widening to -26 dollars/ton.
     September New York (KCEU6) settled US$ 0.85 cents down. Volume was average at 38,501 lots including an estimated 1,115 EFP's, 36 EFS's, 307 TAS and 13,885 spreads. 2,838 calls and 2,464 puts also traded. The KCEU6-LRCU6 arbitrage: 57.75cts -0.70cts Ratio: 1.6969-0.0088. €: 1.1149-0.67%. BRL: 3.2381/$+0.65%. CRB: +1.39%. Crude oil: +3.95%. Open interest: 189,156-103.
     September London (LRCU6) settled up 1 dollar today. Volume was below average at an estimated 10,636 lots including 4,630 spreads, 421 EFP's and no EFS's. 760 calls and 170 puts also traded. Open interest: 105,598+155.
     Guatemala exported 340,964 bags in July, up from 317,528 bags a year ago and from June figures of 334,419 bags, according to ANACAFE.
     The largest Coffee Coop in the World, Cooxupe, said that harvest as of July 29th reached 67.6% in Brazil, comparing to 53.4% a year ago.
     CONAB released a notice for its second auction of 67k bags from the government stocks that will take place on August 11th.
     Support levels for NY Sep16 contract are at 139.05, 136.35 and 134.60, while resistance shall be at 143.00, 144.95 and 146.35.
    Have a good night and good trades tomorrow,
    Rodrigo Costa