INTL FCStone Daily Coffee Report

Arabica Coffee Futures set the highest yearly close today, with the active December contract settling 275 points, or 1.69% higher at 165.65 cents per pound. Prices began the session with strength, gaining 155 points in the first hour of trading and reaching 365 points higher as speculative buying absorbed light origin selling near the previous highs. Participants will focus on the net speculative long position in tomorrow’s COT as they approach 10-year highs and open interest continues to increase. In macroeconomic news, the BOE decided not to cut rates, shooting the British Pound 1.2% higher, while investors await tomorrow’s USA employment report for signs of a strengthening job market and a possible December rate hike.
 
London Market- Robusta edged higher through the session, though failed to generate sufficient volume to test recent highs. Continued rainfall in Vietnam remained a deterrent to traders looking to sell , while origin pressure remained absent as flat price action stagnated. A 1688 lot increase in open interest suggests the presence of additional spec buying continuing to support London. Sustained strength in the ‘C’ contract provided the signal for London to move higher, with the March/March arbitrage widening through 71 cents. Options turned over reasonable volume with 875 lots of Jan 2000 put rolled into the March 2100 strike, paying $57.