INTL FCStone Daily Coffee Report

Arabica coffee futures closed lower Monday on speculative liquidations. The most active contract for December delivery settled 135 points lower at 164.15 cents a pound. The selling was caused by the COT figures released Friday, which showed the non-commercials holding now a very large net long position of 51,090 lots. The open interest continued to increase, evidencing the new longs. The OI added 1,309 lots to 211,047 as of Friday Oct 28, a new record. No significant activity was noted on the options ring.  Participants remained focus on the technical action of the prices as some anticipate a possible correction. Oscillators are over-bought and the hefty spec long position makes the market vulnerable to the downward move.
 
London Market- London failed to progress higher following Friday’s dynamic settlement, as remaining November book management occupied traders’ attention.
Level’s fell sharply off of the opening bell as traders sold London in expectation of a weaker New York. The significant build in the fund position on Friday’s COT Report being taken as a negative.  Alongside the initial liquidation, the presence of origin selling helped to place a lid on the market while support came from commercial longs looking to add into the base of the day’s range. With the board unable to carve out a clear direction of its own accord, much of the remaining price action of the session tracked movements in New York.
The advent of First Notice Day in November did attract volatility into the nearby discount with the November/January structure widening out to $48 premium on the back of last minute book-squaring. This week’s COT report in London showed the managed money community increase their net long by another 2,209 lots. The gain comprising of 3,049 lots of fresh longs and 840 lots of shorts.