INTL FCStone Daily Coffee Report for July 29/17

Arabica Coffee futures traded higher on Thursday, after yesterday’s 4 cent bounce. The active contract for September delivery settled 115 points higher at 135.95 cents per pound. Prices reached early highs at the opening, filling up a gap from the 6-cent drop from a couple of days ago. Prices consolidated sideways, uncovering origin selling during the short-lived rallies. Nearing towards the close, prices recovered from negative territory, closing at the 100-day moving average (135.70 U). The commodity complex was once again helped by a recovery in crude oil, although a stronger dollar ahead of GDP figures tomorrow limited the upside. The Brazilian real weakened 0.57% to USDBRL3,1544, prompting origin selling. Volume remained stable at 31,371, while open interest was seen decreasing 2,575 lots, suggesting further short covering during yesterday’s recovery.
 
London failed to attract sufficient follow through buying to pose a serious test to nearby highs, instead remaining firmly operational within the recent range. Overnight Dollar weakness following the conclusion of the Fed’s meeting saw a more bullish tone among traders ahead of the opening, although this never fully materialized into a prolonged test to the upside.  With commercial interest thin on either side of the market, attention turned to New York, but a stumbling performance in the ‘C’ contract did little to attract fresh interest into London, which ultimately closed the session around unchanged. The Sep/Nov spread did turn over some reasonable volume, trading a $7 range through 2500 lots with further decent volumes seen in the Nov/Jan.  With only 182 tenders for the session and front month open interest at 1438 lots, it is expected that a considerable open interest will be carried into the final couple of sessions of the month.