Evening Coffee by Societe Generale
After rallying nearly four cents in the first two hours of active trading, to within forty points of the July 15th downtrend line, New York coffee fell sharply over the next three, eliminating all of the day's gains and trading to within two ticks of the early low.
Daily downtrend would be broken above today's high (140.75¢ in Sep16).
September New York (KCEU6) settled near its low (15%), up ten points. Volume was forty-one percent above average at an estimated 58,016 lots including an estimated 531 EFP's, 523 EFS's, 1,665 TAS and 1,665 spreads. 3,600 calls and 2,425 puts also traded. The KCEU6-LRCU6 arbitrage: 55.01¢. Ratio: 1.6734. €: $1.1185+0.2%. BRL: 3.1878/$+0.1%. CRB: +1.4%. Crude oil: +2.4%. S&P500:+0.2%. Open interest: 178,952-6,771 (50-day stochastic: 34%; 125-day: 29%).
September London (LRCU6) settled in its upper half (60%), down two dollars. Volume was eleven percent above average at an estimated 15,645 lots including 5,361 spreads and 723 EFP's. 1,750 calls and 800 puts also traded. Open interest: 109,229+212 (50-day stochastic: 100%; 125-day: 27%).
ICE Europe reports that swap dealers were net sellers of 1,735 10-tonne lots of robusta coffee in the week ending August 9th leaving them net short 4,048 lots. Managed money bought 840 lots, increasing their long position to 25,386. Other reportables bought 677 lots (long 9,747). Non-reportable traders bought 312 (long 3,215). Commercial traders sold 95 lots (short 34,300).
The Green Coffee Association estimates that U.S. warehouse stocks of coffee rose 97,965 bags in July to 6,308,577. Last year they rose 373,235 bags in July to 5,883,349 bags. Over the 1989 to 2015 period, stocks rose by an average of 107,723 in July. The next four months (Aug-Nov) have shown increasing declines over the same period.
Vietnam exported 139,800 tonnes of coffee in July, the customs department says, down 11.8% from June, 13.6% lower than last July. 10-month shipments were up 31.5% yr./yr. to 1.46 mln tonnes.
World Weather, Inc. - Showers to occur periodically this week across Brazil coffee belt. Cooling is expected during the weekend and early next week. No frost or freeze likely through Saturday, but temperatures will be closely monitored for late this weekend and into early next week.
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