INTL FCStone Daily Coffee Report for June 8, 2017

Arabica coffee futures for July delivery closed 20 higher at 125.75 cents a pound. The session was dominated by spreads trading. Volatility decreased substantially as the market traded inside a very small range. Volume reached 52,131 lots including 17,778 switches. The beginning of the Index fund roll put some pressure on the nearby July-Sep switch that ended at -2.30 cents. In the options, good volume of in-the-money puts calendar rolls was noted from July to August or Sep. Commodity markets in general were affected by a sharp drop of the crude oil. The crude oil fell 4.7 % on unexpected jump in US stockpiles. The dollar was mostly unchanged after posting the lowest level since Trump election yesterday. Concerns about the future path of the interest rate kept investors on attentive. The UK will hold a general election tomorrow and the European Central Bank will deliver the policy statement. Lack of Call volume suggests diminishing worries to the upside.

While New York is buffeted by the funds, the arbitrage and debates over the accuracy of weather reports, London has been left somewhat to its own devices. So far the results are less than spectacular, the board seemingly unable to breakout of the nearby 1985-2025 range which has been in place all week. Despite the lack of price action, we are beginning to note a pick up in the pace of the turnover, driven partly by the recent activity in the front spread but also by origin’s increased willingness to sell at these levels. 17,652 lots is the largest volume of the week so far. Tonight’s settlement around mid-term moving averages simply highlights that we have found short-term equilibrium.