INTL FCStone Daily Coffee Report
Arabica Coffee futures ended slightly lower, with the December contract losing 60 points and settling at 153.10 cents per pound. Overall it was a calm session in which the “C” contract traded in negative territory for most of the day before finding good support on the 152.15 area, where the 20 day moving average and the Fibonacci retracement build a good base. The volume reached 28,647 lots, including 6,822 switches. On the fundamental side, Honduras is expected to increase their production for the 2016/17 season to 7 million bags with exports around 6.4 million bags for that same season. The US dollar started the session higher after a notable durable goods economic report, however it ended the session lower vs the BRL and the COP after the Energy Information Association showed a withdraw of inventories of 1.9 million barrels for the week in the US and a surprising announcement from the OPEC members during their meeting in Algeria stating that they will cut their daily collective production from 33.24 million barrels to 32.50 million barrels. The oil cartel will set production ceiling per country during their next meeting in November. As a result, oil settled almost 5 percent higher pushing the dollar lower.
London Market-Values in Robusta continued to drift as a lack of turnover failed to generate significant momentum in either direction. An early breach above the psychological the $2000 barrier offered the board the opportunity to test the upside, only for the gains to be undone by weakness in New York. Values proceeded to edge lower for much of the balance of the afternoon, pressured by a stronger dollar. Traders seem to be on the hunt for ‘safe havens’ outside of equity investments right now and the greenback is an obvious choice. With 30 minutes to go it seemed as if the low volume was going to translate into lower prices. Not so. As the selling thinned a rush of short-term trader short-covering in both markets saw London trade back to unchanged by the close. Nov/Jan weakened slight to end the day trading -22 while Jan/March remains firm around -8. Options activity simmered, with out-the-money puts still the focus as funds look to protect long positions.
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