INTL FCStone Daily Coffee Report

Arabica coffee futures extended gains Thursday as specs continued to add long positions. The most active contract for December delivery settled 110 points higher at 164.80 cents a pound. The volume reached 45,575 lots, including 10,454 switches. The March 200 calls continue to attract volume, with 1170 lots traded. The open interest for futures reached a record high on Oct 26, of 209,653, validating in certain way the recent price rally. Some volatility affected the market after the opening, but had the tendency to slow down by the end of the session. With rains in Brazil developing in favorable conditions, a tight domestic market appears to be the steam that is helping prices. According with some sources, current scenario for exports is tough. “Prices offered by international buyers don’t cover replacement cost “, they said. In London the Robusta market’s performance added the bullish sentiment. Concerns of possible defaults are causing the forward curve flatten out. In macroeconomic news, speculative participants will eye tomorrow’s US GDP data, expected to reach a growth of 2.5% quarter over quarter for movement in the dollar and the overall commodity complex.
 
London Market-London operated in sideways fashion as November book management provided much of the session’s activity.
A failure to break above yesterday’s high at $2188 offered restbite to the recent resurgence to the upside despite origin pressure remaining limited. Support continued to be found through roaster buying, fixing in good volume with values holding firm at yesterday’s settlement.
Attention turned to the Nov/Jan switch, which narrowed as far as level money with residual longs rolling as open interest dwindled. The bulk of the session’s volume was driven through EFPs, with the posting of 11500 lots representing the rolling of the certified stock holder into March.
Technically the market remains firm with recent strength in New York supporting fresh London highs. The psychological $2200 remains the near term target higher, which could be signified by  a breach of the double high at $2188.