Evening Coffee by Societe Generale
After reaching an 8-week high in the first half-hour of active trading, New York coffee trended lower over the next four hours, just over three cents from the high. We traded in a one-and-one-half cent range off the lows the rest of the session. We closed near the day's low, fairly close to the opening, well off the day's high - a shooting star in candlestick jargon, likely signaling a market reversal.
July New York (KCEN6) settled near its low (15%), down ninety points. Volume was twenty-nine percent above average at an estimated 51,099 lots including an estimated 956 EFP's, 73 EFS's, 1,265 TAS and 17,243 spreads. 6,863 calls and 7,621 puts also traded. The KCEN6-LRCN6 arbitrage: 56.08¢. Ratio: 1.7278. €: $1.1316-0%. BRL: 3.4932/$+¼%. CRB: +0.7%. Crude oil: +0.9%. S&P500:-1.0%. Open interest: 187,270+2130 (50-day stochastic: 40%; 125-day: 55%). No notices were issued.
July London (LRCN6) settled smack in the middle of $16 range (50%), up thirteen dollars. Volume was twenty percent below average at an estimated 14,303 lots including 5,419 spreads and 427 EFP's. 1,370 calls and 3,355 puts also traded. Open interest: 107,474-1,175 (50-day stochastic: 8%; 125-day: 7%). No tenders were posted.
The Green Coffee Association estimates that U.S. coffee stocks fell 5,978 bags in April to 6,023,001 bags. This is still 15.7% higher than the 5,204,078 bags in store at the end of April 2015. Over the 1989 to 2015 period stocks rose an average of 28,038 bags in April. Last April they were up 168,969 bags.
ICE Europe reports that commercial traders were net sellers of 12,495 10-tonne lots of robusta coffee in the week ending May 10th leaving them net short 5,370 lots. Managed money were the biggest buyers at 10,557 lots leaving them long 9,413 lots. Other reportables bought 1,959 lots (long 8,509). Swap dealers sold 1,719 lots (short 14,823 lots). Non-reportable traders bought 1,697 lots (long 2,271).