Evening Coffee by Societe Generale
New York coffee gapped up today as the market's opening is earlier than morning low temperatures in Brazil are usually available. We broke back below yesterday's highs at the beginning of active trading, never to trade back above the previous peak the rest of the session. With no recurrence of yesterday's unexpected, moderate frost, we traded steadily lower the rest of the day, falling just over five cents from the high in the first minute of the settlement period.
Cooler weather will be seen Friday across southern coffee areas of Brazil. A little patchy frost like that seen on Monday is possible, but most areas will not be cool enough for such conditions. - World Weather, Inc.
September New York (KCEU6) settled near its low (6%), down 2.90¢. Volume was forty-four percent below average at an estimated 21,959 lots including an estimated 550 EFP's, 52 EFS's, 329 TAS and 4,425 spreads. 7,638 calls and 4,084 puts also traded. The KCEU6-LRCU6 arbitrage: 65.31¢. Ratio: 1.8101. €: $1.1017-½%. BRL: 3.2606/$-0.2%. CRB: -1.1%. Crude oil: -0.9%. S&P500-¼%. Open interest: 178,270+2,889 (50-day stochastic: 29%; 125-day: 22%).
A bearish engulfing day in Candlestick jargon. Daily uptrend dating back to June 1st is at 146.04¢ in Sep16 tomorrow. Key support at July 8-11 chart gap: 145.05¢@ 144.35¢.
September London (LRCU6) settled in its lower quarter (15%), down two dollars. Volume was forty-one percent below average at an estimated 9,693 lots including 2,675 spreads, 225 EFP's and 303 EFS's. 1,365 calls and 643 puts also traded. Open interest: 102,729+239 (50-day stochastic: 35%; 125-day: 13%).
ICE Europe reports that commercial traders were net sellers of 8,006 10-tonne lots of robusta coffee in the week ending July 12th increasing their net short position to 30,064 lots - the biggest short position that they have held since the end of 2014.
Managed money was the biggest buyer, at 4,124 lots, increasing their net long position to 20,833 lots. Swap dealers bought 2,359 lots (short 3,369). Non-reportable traders bought 862 lots (long 4,151). Other reportables bought 661 lots (long 8,448).
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