INTL FCStone Daily Coffee Report

Arabica coffee futures ended lower Friday affected by a weak technical performance. The nearby December contract settled 145 points lower at 157.85 cents a pound, while the most active March contract settled 85 points lower at 162.10 cents. Volume reached 35,843 lots including 9,047 lots. The nearby switch widened to -4.25 cents due to last minute selling ahead of the first notice day Monday.  There were reports that the Brazilian government was discussing the easing of regulations to allow the import of Robusta to reduce the Conilon insufficiency in the domestic market. Today, the soluble industry, ABIC, ruled out the re-import of coffee in Brazil in the short term, due to a phytosanitary prerequisite from the Agriculture Ministry, which could take several months. During the week, coffee prices fell 1.60 cents or 1.0 %. A strong US dollar encouraged producers selling, and the off-set of position ahead of FND contributed to add weight on the prices. The coffee market will be closed next Thursday, and will close early at 1:00 pm on Friday.
 
London Market-Another subdued flat price session, as participants observe widening premiums developing through the first quarter of 2017. Jan17/Mar17 traded out to $36 premium on 2,691 lots as momentum alone in the premium attracts fresh speculative/ system longs. There were zero tenders registered today. The total this month stands at 42 lots of originals, of which 23 lots are Conillon. Reports overnight suggested the Brazilian Government would consider the re importation of Conillon aiding internal roasting commitments. A situation which will be watched closely, but by no means neutralises the short fall. Technically whilst the market continues to hold above near term average and stochastics continue to face higher, some of the shorter term longs will be airing concern against the slowing upside trend strength.  We would expect a change in sentiment should the market test below $2143 basis Jan17.