Evening Coffee by Societe Generale

After running buy stops at 5-month highs in the first hour of active trading, New York fell over 2½¢ into negative territory. Weakness in the euro limited buying, although much of Europe was closed for a religious holiday. We rallied back to close just over one-half cent from the day's high, well above yesterday's high and above a daily downtrend dating back to April 21st. The 9-day smoothed stochastic turned positive.
     Jul16 London coffee closed above its 200-day moving average for the first time in its history, at its highest level since the first week of December. Scale-up selling from Vietnam emerged to meet the new highs. Jul16-Sep16 traded into a $5 discount.
  July New York (KCEN6) settled three-quarters to its high (75%), up 1.80¢. Volume was twenty-seven percent below average at an estimated 31,327 lots including an estimated 536 EFP's, 11 EFS's, 479 TAS and 9,690 spreads. 2,548 calls and 4,482 puts also traded. The KCEN6-LRCN6 arbitrage: 47.63¢. Ratio: 1.6494. €: $1.1398-0.8%. BRL: 3.5417/$+0.2%. CRB: -0.7%. Crude oil: +¾%. S&P500:-0.1%. Open interest: 195,230+2,417 (50-day stochastic: 78%; 125-day: 74%). No delivery notices were issued.
     July London (LRCN6) settled in its top quarter (79%), up thirty-two dollars. Volume was forty percent above average at an estimated 26,314 lots including 9,066 spreads and 305 EFP's. 3,355 calls and 1,900 puts also traded. Open interest: 107,144+224 (50-day stochastic: 3%; 125-day: 3%). Seven original tenders and 82 retenders were posted.
     The Department of Commerce reports that the United States was a net importer of 2.148 mln 60-kg bags (and equivalent) of coffee in March, down 7.3% from 2.317 mln bags in March 2015. 12-month net imports, however, were up 5.5% at 25.469 mln bags versus 24.143 mln bags in the Apr14-Mar15 period.
John Bernardi