INTL FCStone Daily Coffee Report for June 2, 2017

Arabica coffee futures extended losses Thursday as specs continued to accumulating shorts. The most active contract for July delivery settled 165 points lower at 127.70 cents. Volume reached 35,873 lots including 7,274 switches. The active July-September switch ended unchanged. Good activity began to be noticed. A possible bottom formation encouraged speculative buying early on the session, however they reversed position as the market failed to exceed the 130 level on the July chart. The US dollar raise after a better than expected monthly employment report improve the confidence in the US labor market. The real declined 0.5% at the end of the session to USBRL3.2452. The benchmark Brazil interest rate was reduced 1.0 % to 10.25 %.
London struggled to generate momentum in either direction with values content to hold inside recent parameters, a theme which was also reflected in New York. A brief test above $2000 failed to attract sufficient intra-day longs into the market to re-test the recent high at $2025, as small clips of origin selling retuned to render the move above the option strike as temporary. Technical support emerged once more around the 20 day moving average, limiting London to a narrow trading range for the session and is something which short term Bears will look for if the market is to move lower through the remainder of the week.
The July/Sep switch weakened further through the session, moving back out to $20 discount through 3000 lots as spec buying liquidated into the commercial short. Despite the relatively flat nature of the market, an overnight increase of 2166 to open interest pushed overall exposure in London to the highest level since April 27 and is something which will continue to be monitored over the coming sessions.