ICE Coffee Futures Continue to Recover

Arabica coffee futures began the session slightly higher and traded most of the day in positive territory only
getting as low as 122.05. At its peak the September coffee futures market went as high as 125.35. Officially
Arabica coffee futures for September delivery settled at 124.90 cents/pound, 275 points higher than the previous
close. After 2 consecutive positive closes, this market remains in a downtrend, and will need to close above the
50-day moving average which sits at 129.96 in order for the bulls to have some real hope.
Brazil Cooxupe Coffee Farmers’ Harvest at 41.6% as of July 25 Harvest of current 2015-16 crop down from 64.6%
year ago, Cooxupe said in e-mailed report. As of July 29, bean stockpiles monitored by ICE fell to lowest since
Sept. 2012 “People are watching closely weather developments to assess supply prospects for next year” and are
also waiting “for more clarity about the situation with the Brazilian harvest,” Hernando de la Roche, senior VP for
INTL FCStone in Miami, said in telephone interview. Meanwhile in Vietnam and Indonesia they are warning that
El Niño is causing dry conditions that could threaten their crops.
London Market - Pace in London was better today as the market started to round off the July position before it’s
expires at lunch time tomorrow. The working exposure was down to 599 lots into the session with 173 lots
delivered today taking the cumulative for the month to 7,947 lots. Switch business was the only volume on the
spot with attention moving onto September which recorded a narrowing of the discount back into $17 during the
morning. Higher flat price action encountered limited origin response with the focus to sort end of month
positions generating the bulk of activity. Open interest was down 405 lots with the liquidation in July driving the
change for the board. Most positions are being pushed down the board into November as the uncertainty
surrounding the September after the events in July grow. Arbitrate values worked back towards the 50 cents
pivot number as the covering picked up into New York and selling backed away in London. Despite a decent
performance on the day the board has more ground to make up before it changes the short term format with
bigger indicators towards the 1680 area in September with consideration that we record a month change on
Monday.