INTL FCStone Daily Coffee Report

Arabica Coffee futures for May delivery settled unchanged on Thursday at 139.30 cents per pound after trading within yesterday’s range on modest volume, 28,013 lots. Volume was propelled by 7,650 switches. Weakness in the Brazilian real, 0.55% to USDBRL3.1367, did not seemed not to influence price activity. Unemploymen figures for Brasil will be published tomorrow. Meanwhile, the dollar strengthened 0,49% after 4Q US GDP growth figures came out better than expected (+2.1% vs +2%). Lack of fundamental news was noted in the sideways trading. May futures have been unable to settle above the 140.00 level since March 23rd. From a technical standpoint, prices continue trading within the recent range, with resistance near the 20-day moving average (141.17 May) and support near the monthly low (136.20 May). In options, activity was subdued, with 100 lots of the June 137.50 Puts trading 100 times and the 147.50 Calls trading 80 times.
 
Activity surrounding the nearby structure accounted for much of the turnover throughout a relatively benign session in London.
Flat price action remained influenced by the arbitrage as values tracked directional movements in New York with the May/May looking to hold above 40 cents.  Scatterings of Asian origin selling kept a lid on prices through the early parts of the session, although was limited in volume and refrained from following the market lower as New York moved into negative territory. The May/July switch traded a $4 range, strengthening into $17 through 2000 lots.
The posting of a 1977 lot EFP basis November boosted overall volume, following on from a further 1795 lots which was posted on Tuesday. With one day to go until last trade date for the March delivery contract, there were 16 re-tenders in London, with overall re-tenders now standing at 123 lots. Overnight open interest for March shows 95 lots remaining open which will be closely monitored by participants heading into the expiration of the contract tomorrow.