INTL FCStone Daily Coffee Report - Oct 3'17

Arabica coffee futures for December delivery settled 85 points lower, at 127.20 cents a pound Monday, as the forecasted rains began to develop across the Brazilian coffee belt during the weekend. A firm dollar also contributed to put pressure on the prices. The dollar has risen in recent sessions as market participants get more positive that the Federal Reserve will increase the interest rates before the end of the year. The euro was affected by the Catalan vote in Spain, that generates political uncertainty in the euro-zone. The heavy rains in Brazil added bearishness to the grain and soy complex.  Crude oil lost 2.11 % at $50.58 as data released suggested a bigger global production.
 
Nearby structure drives further into premium to provide support to London as momentum fuelled selling in New York fails to spill into Robusta.
Overnight Dollar strength resulted in early pressure across much of the wider commodity complex although a narrowing arbitrage limited the downside momentum of London. Additional support was generated via the Nov/Jan spread which drove further into premium, strengthening into $33 premium through 1500 lots. Flat prices responded to the strength in the nearby structure, with fresh technical buying emerging as values drove through the 20 day moving average at $1982 and Friday’s high at $1986. A void or resting overhead origin selling did little to provide firm resistance. A settlement above the option strike at $2000 is likely to be viewed favourably by participants, with technicians now targeting a re-test of the recent high at $2038 basis Nov17