INTL FCStone Daily Coffee Report for August 17/17

Arabica Coffee Futures settled lower for the third consecutive session, with the active contract for December delivery losing 1.05 cents at 134.50 cents per pound. Overnight buying helped prices gap upwards at the opening, reaching early highs before trading lower throughout the session. Prices found support near the lows of the second half of July and the 50-day moving average. Volume remained high, trading 49,588 lots. Open interest continued declining by 3,842 lots, approaching FND August 23rd. In macroeconomic news, FOMC minutes revealed that several Fed policymakers were prepared to announce a start date for the shrinking of the US central bank’s balance sheet at the latest rate-setting meeting, but most preferred to wait for additional information on the economic outlook and developments potentially affecting financial markets. The dollar dropped after the close, reversing intraday gains.
 
London maintained its recent negative trajectory to close lower for the third consecutive session and print lows last seen in mid-June. Outright values consolidated higher through early trading, supported by the continued absence of origin selling within this recent move lower. The test to the upside proved to be short lived, however, as a fresh bout of technical selling re-entered into London as values moved through yesterday’s low at $2050 basis Nov17. Commercial buying retuned towards the lower realms of the daily range to absorb much of the negative momentum. The nearby structure defied the flat price weakness to strengthen throughout; the Sep/Nov switch trading into $7 premium through 4000 lots whilst the Nov/Jan strengthened back to $20 premium. September options expired  with an anchor price of $2075 whilst good volumes were traded further down the board;  1375 lots of Nov 2300/2050 fence traded at $52  with a 59% delta at $2075.