INTL FCStone Daily Coffee Report
Arabica coffee futures finished higher Monday, helped by the currencies. The most active contract for March delivery settled 135 points higher at 144.20 cents a pound. The activity began to improve as traders are returning from the end of the year break. Volume reached 34,311 lots, including 8,081 switches. The active Mar-May switch widened 5 points to end at -2.35 cents. The dollar declined 0.2 % as traders took profit. The real remained firm, trading at USDBRL3.1947, up 300 points during the session. Concerns about the dry weather in Espiritu Santo continued as some coffee growers resumed irrigation. According to Cooabriel , a coop in Espiritu Santo, the drought already had affected the region for the past 20 days. Espiritu Santo is the main Robusta producing state in Brazil.
London Market- Overnight dollar strength saw values fall lower off the opening bell, albeit in low volumes, with origin pressure all but absent. With little action occurring in London, participants turned to the movements of the ‘C’ contract for direction, as values bounced higher due to strength in the Brazilian Real. Intra-day longs arrived in London to move values positive for the day, though upward momentum remained limited by arbitrage traders selling London as the H/H widened to 47.5 cents. Last week’s high at $2167 remains the key short term target for moves higher. Much of the days turnover was generated through the Mar/May switch with over 2500 lots traded, while March book management saw 2000 lots of EFP’s posted.
This week’s COT figures, based on the disaggregated futures and options sector showed a 2,413 lot increase to the managed money net long which now stands at 34,372 lots long. The merchants added an additional 4,591 lots to their net short position which reads at 34,690 lots short, predominantly achieved through 5,050 fresh short positions. Tenders for January’s delivery month still remain at 0.
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