INTL FCStone Daily Coffee Report
Arabica Coffee futures began the session with technical strength, fueled by a constructive chart and reports of hail amid strong rains in Brazil’s coffee regions. Prices reached a high of 151.15 cents per pound for the active contract for December delivery. The climb was capped after prices failed to break Monday’s high and the 20 day moving average (151.70,151.50 respectively for Dec). Strong rains were reported in Brazil’s coffee regions, which pressured the market lower. Dry weather is expected for the weekend in most of Brazil’s coffee producing areas. In related news, Colombian coffee production for 2015-2016 exceeded 14 million bags (up 5% yoy) while exports totaled 12.34 million bags (up 0.5% yoy).
London Market-It seems the recent phase of corrective price action may be coming to an end as values turned sharply higher today, although in the grand scheme of things volume is still subdued. Outright activity was flat through the morning as many traders stood on the sidelines. Even the pace of business in the nearby structure ran below par: a lack of fresh fund rolling allowing the nearby discount a rare respite from weakness. With roaster buying persistent into the bottom end of the near-term trading range and with origin notable only by their absence at these lower levels, it took only a little prompting from the ‘C’ market to bring a heady mix of trade buying and short-term spec short covering into London. Strength in the Brazilian real only helped to accentuate the move; dragging prices higher as the board continues to operate comfortably to the upside. The $2000 mark, (once a short-term upside target) is once more very much within reach.
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