INTL FCStone Daily Coffee Report

Arabica Coffee futures in the ICE Exchange settled slightly lower on Wednesday, after reaching new highs for the year. The active contract for December delivery settled 80 points lower at 163.70 cents per pound. Prices were firm from the opening, as the speculative community followed the upward momentum. Prices reached a high of 165.75 cents per pound for December, and consolidated lower during the last three hours of trading as long participants took profits and origin selling intensified. Weakness in the Brazilian real, losing 0.80% at USDBRL3.1384 at 5pm EST helped pressure the market lower. In options, over 1000 lots were traded in the May 180 Calls, and 600 lots in the May 210 Calls, suggesting large clips of upward protection.
London Market- Early strength off the opening bell was a response to additional final hour strength in New York last night, as values drove to levels last printed in October 2014. With price action once again tracking movements in the ‘C’ contract, a test of the session’s lows was a result of early corrective action in the Arabica contract. Resistance emerged at the intra-day double high at $2188 which now becomes a upside target as the market edges towards the psychological $2200 barrier. The Nov/Jan switch continued to attract turnover, narrowing $8 to -$17 as residual November longs were rolled ahead of Tuesday’s first notice day. A further 2607 lot reduction in Nov open interest reduced the total to 18733 lots, with around 13,500 lots of the certified stock holder expected to be rolled via an EFS. Options turnover was present, with 500 lots of the Jan 2400/2050 fence (to the put) bought at $10 with 210 January futures bought at $2183.