INTL FCStone Daily Coffee Report for Aug 8/17

Arabica coffee futures continued to advance Monday on spec short covering. A breaking of the recent highs encouraged the action. The benchmark contract for September delivery settled 190 points higher at 142.05 cents a pound. The volume increased considerably boosted by 13,962 switches, reflecting the beginning of the index fund roll period. Options related buying added support to the prices. Decent size of the 150 Calls, Sep and Dec was noted. A weak dollar gave support to markets and coffee prices.  Market participants will focus on different speeches from the FED officials to have hints about the rate increase and the US policies. A firm real prevented domestics sale in the Brazil local market. The real ended at USDBRL3.1263 -54. The market in Colombia was closed on holiday.
 
With the US Commitment of Traders reports showing a larger than expected decline in the net fund short position, pre-market sentiment in London was decidedly bearish even if many thought any weakness would be short-lived. It was. Apart from a few lower prints on the opening the board held well. How a market takes news is important and Robusta’s strength was a cause for early shorts to cover.  As the market cleared downtrend resistance around $2150, momentum swung in favour of the bulls and prices moved swiftly to re-engage the upside. Gains in New York only added to buyers confidence prompting a strong close towards the top end of the recent trading range $2100-2175.