INTL FCStone Daily Coffee Report for July 10/17

Arabica Coffee Futures settled slightly lower on Friday, with the active contract for September delivery falling 20 points at 128.90 cents per pound. Prices began the session under pressure, after yesterday’s technical behavior prompted liquidations. Prices reached over 200 points below yesterday’s close. Strength in the Brazilian real helped stop the fall, and on lack of follow through, short covering pulled prices back to unchanged levels. The commodity complex was under the pressure, as the dollar gained ground on mixed employment figures. Crude fell 2.9% or $1.32 per barrel. The Brazilian real strengthened 0.72% against the dollar to USDBRL3.27, while the dollar index increased 0.22% to 96.013. Weather in Brazil is expected to remain stable with no threat of frost, with some showers in Espiritu Santo, and dry weather in Minas. During the short week, coffee prices increased 3.2 cents, as speculators continued covering short positions on a constructive technical pattern.
 
Firm Asian pressure through the opening exchanges, saw early marginal gains turn to heavy losses as stops were elected through the previous sessions low at $2140 basis Sep17. Downside pace swiftly slowed following the failure to breach support at $2100 basis, encouraging intra- day shorts to cover drawing values back above $2220, which acted as the pivot through mid-season. A secondary test and failure to breach support at the physiological $2100, saw values set into a holding pattern above $2110 concluding the week.
 
The option market continues generate turnover with Sold 500 Sep17 2150 call bought 1000 Sep17 2200 call sold 140 Sep17 @ 2127 trading at $31 as a package.