ICE Coffee Futures Break Yearly Contract Lows by FC Stone

“C” Coffee Futures contracts broke contract lows for the year as the March delivery contract settled at 115.80 cents per pound, 295 points lower. The December delivery contract reached a low of 111.60, levels not seen since December 2013, yet settled at 112.15 cents per pound, 315 points lower. The structure between December and March traded a volume of 14,262, out of 20,952 total switch volume and closed at -3.60 after reaching a low of -3.70 cents. Total volume reached 64,099 lots.
 
After  a  quiet  morning,  prices  began  to  fall  as  the  Brazilian  real  and  Colombian  peso  weakened  against  the  dollar. Disappointing GDP growth figures in Europe gave the dollar the support it needed to devalue emerging market currencies. In  addition,  the  falling  oil  prices  put  pressure  on  the  Colombian  currency,  while  rumors  of  replacement  of  Brazilian government officials aided in the real’s downfall. The Brazilian real closed at BRL 3.8494 and the Colombian peso at COP 3075.
 
Favorable weather in Brazilian coffee regions also put pressure on coffee prices.  Reports from Sintercafe in Costa Ricaforecasted a potential for 60 million bags for Brazil’s 2016 harvest.  
 
Wednesday was Veteran’s day in the United States so the COT report will come out on Monday.