Evening Coffee by Societe Generale

After surging to a five-day high one hour into active trading, New York coffee sold off sharply over the next ninety minutes, nearly six cents off the high, likely influenced by sharp selloffs in other soft markets (cocoa fell $136 in one three-minute period, sugar lost sixty points at around the same time). We climbed back steadily the rest of the session, topping out at over four cents from the low at the end of the settlement period. We finished above yesterday's high (positive), two cents above the opening (positive), two cents off the high (negative). The London market traded within yesterday's range in reduced volume.
    September New York (KCEU6) settled in its upper half (63%), 1.35¢ higher. Volume was twenty-one percent above average at an estimated 55,363 lots including an estimated 3,470 EFP's, 239 EFS's, 389 TAS and 16,432 spreads. 6,961 calls and 5,164 puts also traded. The KCEU6-LRCU6 arbitrage: 65.70¢. Ratio: 1.8789. €: $1.1239-0.2%. BRL: 3.4737/$-0%. CRB: -1.4%. Crude oil: -2.6%. S&P500: unchanged. Open interest: 180,112-2,066 (50-day stochastic: 6%; 125-day: 34%).
     September London (LRCU6) settled two-thirds to its low (33%), up two dollars. Volume was ten percent above average at an estimated 20,248 lots including 6,747 spreads and 210 EFP's. 5,565 calls and 4,960 puts also traded. Open interest: 102,108-653 (50-day stochastic: 4%; 125-day: 2%).
     Temperatures moderated over Brazil's coffee growing areas. There is no threat of crop-damaging cold for the next ten days. Precipitation is expected to slowly develop over the coming week from Paraná to southern Sul de Minas.
     Brazil's coffee harvest was 34% complete as of June 14 versus 26% one week earlier, 36% one year earlier, and a five-year average of 33%, Safras & Mercado estimates. 
John Bernardi