INTL FCStone Daily Coffee Report
Arabica Coffee Futures for December delivery settled 685 points, or 3.93% lower on Super Tuesday, as investors aggressively liquidated short-term long positions ahead of the uncertainty US Presidential Elections tonight. Volume reached 109,360 lots, 6k lots shy of the record set over the summer, including 37,963 switches. The nearby Dec-March switch widened to -3.70. Prices reached a new high at the opening, 176.00 for the December contract, and began the liquidation shortly thereafter. Prices found some temporary support near yesterday’s lows at the 170.00 level, yet upon breaking; sell STOP order accelerated the movement downwards to close near the lows. From a technical standpoint, today’s bearish reversal signal (outside negative day) must be confirmed by a close below the support level of 166.90. If breached, prices may tread down to test the 20 day moving average of 161.50, followed by the 100-day moving average of 150.40, basis December.
London Market- The aggressive liquidation of long spec positions saw London fall $109 through the session, breaching and settling below the psychological $2100 level en route.
A reasonably steady opening failed to hint at what was to come, as New York tested higher through the opening exchanges, with London content to hold firm. Only as long positions began to unwind in the ‘C’ contract (presumably ahead of tonight’s election result and potential volatility), did Robusta values start to come under pressure. Trailing stops were elected as the board began to find downside momentum and with little scale down buying resting below the market is was not long before we were breaching the 20 day moving average at $2145 with relative ease. Light industry scales and daytrader profit-taking into the bottom end of the range did provide a brief respite but failed to generate sufficient support to prevent a test and ultimately a breach of the $2100 mark. Technical support starts at the lower Bollinger band around $2063 while the 50 day moving average stands at $2042
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