INTL FCStone Daily Coffee Report

Arabica coffee futures for March delivery settled 30 points lower at 149.30 cents a pound on spec book squaring ahead of the long weekend. The market will be closed on Monday in observance of the Martin Luther King Jr Holiday. Volume reached 30,802 lots including 7,287 switches. Prices were under pressure after the opening on producers selling. According with SOMAR good rains are expected for the main Arabica growing areas of Brazil for the next 3 to 5 days. Espiritu Santo, the main Robusta producer state will receive some rainfall also. During the week, Arabica prices climbed 6.40 cents. The move can be attributed to spec short-covering, evidenced by the dwindling in open interest. The OI declined 9,173lots during the same period. The real was firm during the week, following economic news in Brazil, but gave back the gains at the end to finish with little change at USDBRL3.2230. The COT report published after the close showed the non-commercial sector adding 2060 longs and covering 3873 shorts, for a net long position of 11,037 lots.
 
London Market- Robusta observed a holding pattern for much of the day, closing what has been rather an active week on a more subdued note.  Values were little changed off the opening, with origin pressure all but absent and a lack of buy orders evident overnight. Weakness in the Brazilian Real following yesterday evening’s close continued into today’s session, causing London to track New York marginally lower throughout, although this was observed by many as corrective action. Nearby spreads remained the main driver of volume with reasonable turnover derived from both the March/May and the March/July structure.
The options arena maintained its strong recent activity, with 3000 lots of the July2400 call traded at $85 alongside a 36% delta at $2205. An additional 1500 lots of the March 2400 calls traded at $16 and the market will monitor the open position surrounding these strikes.