ICE Coffee Futures Rebound on Global Markets Recovery by FC Stone

Arabica and Robusta Coffee futures extended yesterday’s price recovery on the back of stabilizing global markets, including  emerging  market  currencies.    The  active  Arabica  contract  for  December  delivery  climbed  2.35  cents  to settle at 124.55 per pound.  Volume was moderate for the session as prices recovered above the $1.25 level on the way to a $1.26 high.  The Brazilian Real rose 550 points and the Colombian Peso rallied nearly 100 pesos discouraging Producer/Exporter selling.  As a result, soft commodities joined energy, grains and metals markets in the ascent as the  Bloomberg  commodity  index  rallied  over  3%  today;  however,  still  down  nearly  16%  for  the  year.   China’s economic moves this week whereby key interest rates and bank reserve requirements were lowered have been seen as positive developments by world markets, as risk-averse investors have begun to step back into equities and raw materials, including Coffee.  Moving forward, with the end of month book squaring now under way we note that December futures are down only 3.07% for August despite the current bearish outlook and perceived downside risk for commodities overall.  A monthly close at 128.50 basis December would leave Coffee prices unchanged for August. In macro factors, oil climbed above $40 a barrel  and the US  stock markets remained firm after data showed the US GDP grew more than expected, at 3.7 percent annualized  during the second quarter.