Evening Coffee by Societe Generale
New York coffee ran light sell stops below the June 1st daily uptrend line but found support just above the underlying chart gap left on the morning of June 11th. We rallied nearly 3½¢ off the low towards the end of the second hour of active trading, finding selling midway between yesterday's opening and its close, then sold off to close midrange, ninety points above the opening level.
Market remains supported by the truckers' strike in Colombia and on fears of further cold weather headed for Brazil's coffee areas at the end of the week. Brazilian roasters are asking for the release of government-owned coffee stocks to ease internal tightness. Exporter Terra Forte estimates those stocks at 1,38 mln bags.
September New York (KCEU6) settled near its low (12%), down 1.90¢. Volume was twenty-five percent below average at an estimated 30,758 lots including an estimated 1,065 EFP's, 112 EFS's, 785 TAS and 6,381 spreads. 4,467 calls and 5,819 puts also traded. The KCEU6-LRCU6 arbitrage: 65.12-1.29¢. Ratio: 1.7936-0.0069. €: $1.1065+0.1%. BRL: 3.2906/$+0.6%. CRB: +1.9%. Crude oil: +4.8%. S&P500:+0.8%. Open interest: 178,270+2,889 (50-day stochastic: 29%; 125-day: 22%).
September London (LRCU6) settled near its low as well (19%), down twenty dollars. Volume was thirty-eight percent above average at an estimated 23,724 lots including 7,896 spreads and 715 EFP's. 305 calls and 475 puts also traded. Open interest: 101,445+1,356 (50-day stochastic: 27%; 125-day: 10%).
Brazilian weather outlooks - World Weather, Inc -...the next coldest morning expected Friday. Some patchy frost will be possible once again in the traditionally coldest areas in southern Sul de Minas and a few other locations, but the impact on most trees is not likely to be very great. Somar Meteorologia - In the period between July 25th and 29th, a high pressure area will cover main coffee areas, bringing cold nights (without risk of freezing).
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