INTL FC STONE COMMENTARY FOR JUNE 26/17

Welcome to our Daily Coffee Market Reports

After Friday’s price recovery, Arabica Coffee Futures gapped higher at the opening and continued higher throughout the first half of the session. The active contract for September delivery settled 150 points higher compared to Friday’s close, at 124.50 cents per pound. Prices began the session firm, nearing the 20-day moving average. Momentum continued until running into a wave of origin selling. Technical resistance and lack of follow-through prompted a short term speculative liquidation, erasing most of the day’s gains. Prices consolidated near the opening print for two consecutive hours, until edging higher at the close. The Brazilian real helped today’s movement, strengthening 1.3% at USDBRL3.30. A cold front is expected to bring rains to the areas of Parana and Southern Minas Gerais over the weekend, while Espirito Santo will see frequent rainfall.
 
The Robusta market traded an inside day as values looked to consolidate following a volatile end to last week. The arbitrage looks to limit the upside potential in London for the time being with September failing to push through $2100 as the Sep/Sep widened to 30 cents. With New York also looking to consolidate following last week’s action, much of the volume was generated via the structure with 6200 lots of July/Sep trading between $11 and $14 discount as front month management gathered pace ahead of first notice day. Open interest fell for the eleventh consecutive session on fresh July based liquidation. July open interest now stands at 24,500 lots with a week to go until first notice day. As we head through the week, those looking for a move higher will seek a breakout above the two previous weekly highs at $2129 and $2149 respectively whilst bears will look towards the recent low at $1987.
This week’s COT figures, using the disaggregated futures and options sector, showed a 2,603 lot increase in the managed money net long position, which now stands at 21,559 lots long. This was through 3087 lots of short covering, taking the managed money net long to its highest level since 9th May.