INTL FCStone Daily Coffee Report for June 13, 2017

Arabica coffee futures closed higher Monday helped by speculative short-covering. The most active contract for July delivery settled 95 points higher at 127.50 cents a pound. The volume was boosted by 33,414 switches, reaching 87,872 lots. The active July-Sep switch narrowed 15 points to end at -2.15 cents and continued to attract a considerable spec participation. Today’s short-covering was caused in part by the last COT report published Friday, that showed the non-commercials short position at 27,011 lots, as Tuesday June 6. This is the largest spec net short position since January 2016. In Brazil weather news, temps were reported lows 1 to 2 C. but above the frost levels in Minas and areas that were expecting cold. There is no forecast of damaging for the next ten days. From Colombia, according to a report from Wolthers Douque, the fly (mitaca) crop is at least one month delayed . Other markets declined due to continued political uncertainty in UK. The fall of technology shares around the world added weight. The real declined to USDBRL3.3212.
A third consecutive session of positive price action propelled London towards the top end of its recent trading range, eroding clips of origin selling en route. An upward trajectory was maintained throughout the session with a greater pace generated once values moved through last week’s high at $2011 basis July. Origin selling picked up in volume as values moved higher, maintaining a firm lid on prices towards the higher realms of the sessions range. Many participants still await a breakout through the nearby high at $2042 in order to confirm a move away from the recent range and to attract volatility back into London. A small reduction of 1899 lots in the managed money net long position in this week’s COT report suggests a comfort for the speculative community at current levels, with minor changes to the net position over recent reporting periods. July book management gathers pace as we move towards first notice day – 4,500 lots of July/Sep trading a $4 range with $20 discount remaining a short-term low, for now.