ICE Coffee Futures Plunge on Brazil Debt Downgrade by FC Stone

Arabica coffee prices plunged to a 19-month low, following a sharp decline of the real.  The most active contract for December delivery settled 470 points lower at 116.40 cents a pound.   Volume increased to 36,438 lots, including 9,496 switches.  The active December-March switch traded  in a small range , ending unchanged at  -3.45 cents.  Last night, the Brazilian sovereign  credit rating was reduced to “junk” , by the S&P Agency, causing the devaluation of the currency.  Losses for the currency that toped 4 % at the  beginning of the session,  triggered commodities selling across the board.  Good rains in the main coffee areas of Brazil, favoring the flowering ,and news about a higher than expected 2015 crop in Colombia added the bearish sentiment.  In Bogota, Colombia, Robert Velez, the newly named General Manager for the Coffee Federation (FNC) said that production could reach 13.7 million bags, higher than the previous estimate of 13.2 million. From a technical view, the breaking of a recent consolidation area, on the Dec chart, poised prices in search for new support levels.
 
Brazil Green Coffee Exports Totaled 2.15 million in August, down 9.8% year to year from August.