“C” prices at the ICE exchange fluctuated in a now well defined range around the pivotal $1.20 area again
today. Spot December futures rose 40 points to 120.90 cents per pound, on heavy spread activity as the
first notice day approaches on November 19 th . Over 26,000 total spreads were transacted today as index
funds, traditional hedge funds, and commercial players all leveraged the additional liquidity to roll out of
December positions. In news, weather reports suggest good rains over the next ten days in Brazil coffee
zones for subsequent flowerings of the 2015-2016 harvest. Looking ahead on the calendar, November 12 th
marks the December options expiration with the heaviest open interest in the Dec. 120, 125 and 130 calls;
while for Dec. puts open interest is concentrated in the nearby 120, 115 and 110 strike prices. Volatility
will likely be elevated over the next few sessions as last minute price fixing ahead of the tender period
enters the daily volume flow, and options traders position for expiry.
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