INTL FCStone Daily Coffee Report

Arabica Coffee Futures fell for the third consecutive day on Thursday. May delivery futures lost 120 points, or 0.85%, settling at 140.50 cents per pound. Volume remained relatively low, reflecting the industry attendance to the NCA event starting today, with a total of 22,356 lots. Prices began the session under pressure, following yesterday’s weakness. Gapping 20 points lower at the opening, prices consolidated 100 points lower before making an attempt to surface to positive territory. A short-lived rally brought prices up to positive territory before short-term liquidation brought prices back to the early consolidation area towards the close. The Brazilian real weakened 1.40% to USDBRL3.1303, adding to the negative sentiment. On a technically driven session, prices tested the recent low below 140.00 basis May. Breakage of the monthly low of 138.60 could push the market to test the previous lows of 135.00.
 
With little noteworthy action resulting from yesterday’s Conillon auction in Brazil, flat price activity was limited through the opening in London, which remained the case for much of the morning. Values looked to test lower as the States emerged on line, responding to weakness in the ‘C’ contract with the Brazilian Real operating under pressure. Light volumes of technical sell stops at yesterday’s low drove values through $2150, although further negative traction failed to establish as industry buying supported the market around the lower realms of the day’s range. The commercial short remained supportive of the May/July switch, which held at $22 discount throughout, although noticeably lower in volume following yesterday’s active session. Moderate activity was visible in the options arena, with 500 lots of the July 2000 puts trading at $27 alongside a 22% delta at $2175.
There were 48 re-tenders for the March delivery contract, 20 lots of Conillon and 28 from Vietnam, with overnight open interest for the month standing at 143 lots.