INTL FCStone Daily Coffee Report for July 31/17

Arabica Coffee Futures for September delivery settled 190 points higher at 137.85 cents per pound. Price began the session with little activity, until US GDP figures were published showing a disappointing 2.6% growth over Q2, weakening the dollar and prompting system buying across the commodity sector, and speculative short covering. Volume duplicated in a matter of 30 minutes, as participants rushed to buy upon finding support at the 135.00 level. Prices consolidated near the highs during the remainder of the session. A firm Brazilian real dissuaded further origin selling, strengthening 0.53% to USDBRL3.1331. During the week, prices continued their up-trend, recovering from a sharp selloff early on. US economic news added volatility to the commodity sector, with the US FED interest decision on Wednesday and US GDP today causing prices to trade in a 9.55 cent range. Book squaring ahead of the end of the month prompted additional short covering. Support was noted against the 20-day moving average, with prices breaking through the 100-day moving average to the upside to mark the fifth consecutive positive week.
 
London failed to capitalise on New York’s  gains closing out the week firmly within the recent range. Gains in NY were soaked up by a widening arbitrage (the Sep/Sep differential moved out to 41 cents) consigning values in London to hold around unchanged for much of the session. As if to underline Robusta’s weakness, the nearby structure also slipped; 3,800 lots of Sep/Nov trading as values fell back to $12 premium. Given the sideways price action, outright price targets remain unchanged both sides of the market with $2150-2177 holding as resistance and $2078-2068 support. The July delivery saw an additional 901 tenders today, bringing monthly totals to 7178 tenders and 4 re-tenders with one session remaining