INTL FCStone Daily Coffee Report

Arabica coffee futures ended lower Tuesday on spec sales.  The selling came when the market failed after posting a new  12-day high.   The most active contract for May delivery lost 50 points to close at 144.75 cents. Volume remain moderate at 21,792 lots, including 3,901 switches. The active May-July switch continued trading inside a small range between -235 and -2.30 cents.  The recent  lack of direction of the market  is failing to attract  participants, as evidenced by the open interest  that in the lowest level of the last three years. Recent data also shows that  the non-commercial position net long position declined 3,291 lots as of last Tuesday to 10,985 lots.  In macroeconomic factors, the dollar,  and the stock market declined on concerns that the promises of the new government will become a political match and could trigger a correction of the markets.  Crude oil declined $0.75 to $48.16 per barrel. 
 
A failure to generate upside traction above $2200 and a buildup of origin selling around these levels provided the platform for values to move aggressively lower  towards the end of the session.
Prices in London edged up through the early parts of the day in response to overnight Dollar weakness although remained limited by the arbitrage with the May/May operating around 45.5 cents. A temporary breach above $2200 failed to generate additional short term long positions entering the market, with values proceeding to fall through a combination of weakness in New York and light clips of resting origin selling adjusting down to market level. Values observed a holding pattern through much of the afternoon before early longs looked to liquidate, triggering technical selling stops at the 20 day moving average at $2169 en route. Nearby structure weakened in response to the move lower, with the May/July moving into $20 discount through  2100 lots and into the hands of the commercial short.
There were 21 tenders for the March delivery month, the first in over a week, with overnight open interest for the month having held at 164 lots for the last five sessions.