Evening Coffee by Societe Generale
After taking out yesterday's low on the opening, London coffee traded steadily higher for the next five hours, culminating with a $48 move that took all of one second (at 9:02:16 NY time). We immediately retraced two-thirds of the move, found buying at yesterday's high, then inched higher the rest of the session - an outside up day. The New York market rallied strongly through the first four hours of active trading. Stops triggered above yesterday's high took us up four cents at its best. We closed near the day's high after opening near its low (a strong white body in candlestick jargon) and finished above yesterday's high. The 9-day smoothed slow stochastic slipped into buy mode in both markets.
Daily downtrend dating back to 17-Jul-16 at 142.68¢ tomorrow in Dec16 KC.
Weakness in the U.S. dollar helped both markets. The Dollar Index closed below a daily uptrend line dating back to 3-May-16.
December New York (KCEZ6) settled in its top quarter (84%), 3.35¢ higher. Volume was two percent above average at an estimated 41,498 lots including an estimated 3,669 EFP's, 212 EFS's, 2,036 TAS and 11,529 spreads. 6,053 calls and 8,183 puts also traded. The KCEZ6-LRCX6 arbitrage: 58.69¢. Ratio: 1.7097. €: $1.1355+0.6%. BRL: 3.2389/$-1.0%. CRB: +1.3%. Crude oil: +2½%. S&P500:+0.1%. Open interest: 168,031-4,306 (50-day stochastic: 0%; 125-day: 0%) - a nine-month low.
November London (LRCX6) settled in its upper third (71%), up thirty-eight dollars. Volume was one-hundred seventeen percent above average at an estimated 32,095 lots including 12,498 spreads and 388 EFP's. 6,053 calls and 8,183 puts also traded. Open interest: 113,021 (50-day stochastic: 100%; 125-day: 35%).
A few of the coolest locations may experience a little light frost Monday and Tuesday mornings in low-lying areas, but most of the (Brazilian) coffee will be spared from damage.
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