INTL FCStone Daily Coffee Report

The active contract for Arabica coffee for December delivery settled 180 points lower at 146.60 cents per pound. The pressure began early, speculative short covering brought prices 35 points higher. Prices moved lower throughout the entire session, breaking recent lows progressively. The downward movement accelerated once prices broke through the 50 day moving average (147.80 for Dec). The next support level can be found around the 100 day moving average (144.40 for Dec). A firm dollar and weak Brazilian real helped push the market down. The dollar reached highs not seen since August, in anticipation of tomorrow’s employment report.
 
London Market- With many heading to Geneva for the European trade’s annual dinner, the Robusta market started the day on a slightly subdued note. Overall turnover was light through the opening hours as buyers and sellers essentially cancelled each other out. A short-lived run to the day’s highs was quickly snuffed out mid-session as the board starts to look more comfortable operating into weakness than in strength. By mid-afternoon upward momentum in the Dollar began to attract more significant origin offers overhead, stymieing any fresh attempts to push higher and returning values to the bottom half of the day’s range. With a Fed rate hike in December looking ever more plausible, additional dollar strength is likely to act as a persistent headwind to prices as we run into the end of the year. Structurally the action was flat while options continued trade in good volumes. 1800 and 1900 puts by far the most popular strikes and a favourite for those funds still looking to buy some cheap price protection against existing longs.