INTL FCStone Daily Coffee Report for July 14/17

Arabica Coffee Futures began the session firm on Thursday, breaking through recent highs on good volume. Over 40,00 lots were traded during the session. The active September contract rallied 360 points, settling at 131.20 cents per pound. Continued strength in the Brazilian real after yesterdays close from the recent political corruption developments held back origin selling as speculative participants covered shorts against a high call open interest. The session began with over 2500 open august Calls between strikes 127.50 and 132.50. In related news, Safras & Mercado noted that the Brazil 2017/18 coffee crop is 56% harvested. This is slightly lower than the harvest last year when 58% was completed and the five-year average of 57%. June GCA inventories will be published on Monday. Stocks have increased 168,259 bags on average over the past five years. Last month, inventories increased 224,169 bags, reaching 7,114,523 bags.
 
Lingering supply concerns for Vietnam and Indonesia across the latter half of this year brought an air of bullish sentiment to the opening of the London market. An upward trajectory was maintained throughout with only scatterings of origin selling returning towards the highs of the day’s range to halt values tracking New York ever higher. Technicians will look for a weekly settlement above $2177 basis September as a short term target for London if the market is to test to psychological $2200 barrier which holds 6000 lots of call option exposure. The pace of the drawdown in Robusta certified stocks slowed overnight with a 44 lot reduction taking total certified stocks to 15,334 lots, with little change in the Sep/Nov switch, which traded a $5 range through only 1500 lots. Activity surrounding the July delivery month picked up with 3212 tenders for the session and participants anticipate a significant reduction in front month open interest when tomorrow’s numbers are released.