Evening Coffee by Societe Generale

     New York coffee eased off over its first fifteen minutes today, finding support midway between yesterday's open and close, then rallied to a 3-week high on calls from one respected meteorologist for Brazilian frost this coming weekend. Selling emerged from Brazil as the opinion on the weather was not close to unanimous.
     Somar Meteorologia calls for a polar air mass to arrive on Sunday causing frost in the producing areas of Parana coffee. DTN calls for high pressure of 1032 millibars to bring much colder weather to the coffee belt early next week, but not cold enough to cause damage. World Weather, Inc. calls for temperatures to cool down later this week into early next week, but no crop-damaging cold. Dawn temperatures are not expected to fall below 3°C, Parana state forecaster Simepar says.
    July New York (KCEN6) settled in its upper third (70%), up one-half cent. Volume was sixty-two percent above average  at an estimated 67,503 lots including an estimated 651 EFP's, 2,087 EFS's, 1,923 TAS and 22,904 spreads. 7,809 calls and 5,826 puts also traded. The KCEN6-LRCN6 arbitrage: 55.31¢. Ratio: 1.7220. €: $1.1360+0%. BRL: 3.4490/$+1.2%. CRB: +0.6%. Crude oil: +1.4%. S&P500:+0.3%. Open interest: 193,503-2,251 (50-day stochastic: 70%; 125-day: 70%).
    July London (LRCN6) settled near its high (86%), up twenty-four dollars. Volume was nine percent above average at an estimated 18,563 lots including 4,897 spreads and 758 EFP's. 2,475 calls and 1,640 puts also traded. Open interest: 104,615-3,877 (50-day stochastic: 0%; 125-day: 0%).
     Colombian truckers began an indefinite strike on Tuesday to protest what they said was a failure by the government to meet agreements on cargo tariffs.
     USDA's Foreign Agriculture Service attaché estimates that Vietnam's 2016/2017 coffee production will total 27.276 mln 60-kg bags, down from 29.300 mln bags in 2015/2016. Exports are projected to fall to 26.550 mln bags from 28.717 mln bags previously.
John Bernardi