Evening Coffee by Societe Generale
New York coffee gapped down, falling as much as 3.30¢ in its first hour, retraced two-thirds of that loss then went out trading near the lows. Stops were triggered below a daily uptrend line dating back to May 5th. The 9-day slow stochastic slipped into sell mode. First support at Monday's low (128.80¢ in Jul16), then at the bottom of the May 6 chart gap - 126.60¢. Jul16 London gapped down as well, rallied to fill that gap, then fell back to close at a three-day low. The slow stochastic fell into sell mode as well. Support in the daily window between $1649 and $1617. Feb 25 daily uptrend line at $1622 tomorrow.
The trade-weighted U.S. dollar index rallied to a 3½-week high.
July New York (KCEN6) settled in its lower third (31%), down 2.60¢. Volume was seven percent above average at an estimated 42,485 lots including an estimated 1,088 EFP's, 40 EFS's, 574 TAS and 15,767 spreads. 2,880 calls and 4,018 puts also traded. The KCEN6-LRCN6 arbitrage: 53.82¢. Ratio: 1.7109. €: $1.1226-¾%. BRL: 3.5541/$-1.8%. CRB: -0.1%. Crude oil: -1.0%. S&P500:-¼%. Open interest: 187,484+214 (50-day stochastic: 41%; 125-day: 56%). No notices were posted. The May16 contract has expired.
July London (LRCN6) settled near its low (13%), down thirty dollars. Volume was eighteen percent below average at an estimated 14,367 lots including 3,358 spreads and 911 EFP's. 1,355 calls and 2,300 puts also traded. Open interest: 109,344+1,870 (50-day stochastic: 14%; 125-day: 12%). Six original tenders were posted.
USDA's Foreign Agriculture Service attaché estimates that Colombia will produce 13.300 million 60-kg bags of coffee in the 2016/2017 crop year, down from a revised figure of 13.600 million bags in 2015/2016 (originally 13.400 mln). Exports are forecast to rise to 12.330 mln bags from 12.310 mln (originally 12.230 mln).
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