INTL FCStone Daily Coffee Report for June 20, 2017

Arabica Coffee Futures settled slightly higher on Monday, on a switch-heavy session. Volume reached 50,844 lots, including 17,022 switches. The active contract for September delivery settled 65 points higher at 126.60 cents per pound. Ahead of first notice day for the July contract, June 22nd, the active N/U switch settled at -2.40, after reaching a high of -2.35 and a low of -2.50. Open interest in the July contract has diminished significantly, with a reduction of 5,337 lots on Friday, and entering today with 17,565 lots. Lack of fresh fundamental news and focus on the switch kept the trading range relatively tight. Friday’s COT figures showed the managed money net short position increasing by nearly 9,000 lots to 33,433 net short lots as of June 13th. The commercial net short position decreased by nearly 5,000 lots to 9,783 net shorts. Colombia was closed on holiday today and will be closed the following two weekends on holidays.
 
Flat price action looks to hold around $2100 basis July ahead of Wednesday’s July option expiration with 5800 lots of open interest at the $2100 call. Though lighter in volume, regular origin selling throughout the morning prevented a test of last week’s highs with much of the rest of the session playing out around the option strike. Having reached historical lows since the Robusta contract changed in 2008, a small correction maintained a lid to London with the Sep/Sep widening back through 30 cents. Having strengthened for four consecutive sessions due to lingering supply concerns for the second half of the year, the Sep/Now switch weakened back into $21 premium through 2000 lots. Certified stocks have edged lower over the last month, falling form 17,215 lots on May 10th to 16,693 lots today. Despite ongoing concerns it is worth noting current stocks remain higher than a year ago, with 15,054 lots of certified stocks held as of July 01 2016.
With the bulk of last week’s action happening after this week’s COT reporting period, today’s numbers showed little change. A small increase of 331 lots to the managed money long position takes its overall net long to 18,956 lots.