INTL FCStone Daily Coffee Report

Arabica coffee futures finished higher Friday helped by the currencies. The most active contract for May delivery gained 90 points to close at 141.35 cents a pound. Volume reached 23,180 lots, including 5,287 switches. Today, the market action appeared to be more influenced by macroeconomic factors, since new estimates of the Brazil crop did not cause a major effect. Prices were under pressure early, but bounced as the BRL recovered 1.5 % to USDBRL3.1447. The dollar edged lower after the US jobs report was published. The US currency declined 0.5%. The move was attributed to profit-taking, according to analysts, the jobs report makes the argument stronger for the FED to raise interest rates. The Fed will meet March 14-15 and a decision is expected. Next week GCA stocks report will be a good indication of the US S&D balance, after Brazil’s exports fell in February to 2.5 million, as reported by CECAFE. In February, US green stocks usually decrease 22,182 bags on average for the past five years.
London closed the week in a similar fashion to much of the previous few sessions as both volume and volatility remained scarce. Values were broadly unchanged off the opening, a theme which continued throughout much of the morning, with most participants awaiting U.S non-farm payroll data after lunch. Prices failed to generate sufficient upside traction to draw significant levels of origin selling back into the market, with many assigning the May/May arbitrage as a lid to the market with values content to hold around 42 cents. Strength in the Brazilian Real pushed New York higher through the remainder of the afternoon, resulting in London operating in negative territory via the arbitrage, although the 20 day moving average at $2164 remained supportive, which will act as the short term downside target heading into next week. A further 1436 lots were added to the overnight open interest which much of the change a reflection of the September put spreads which were traded yesterday.