JUNE 26: ICE Coffee Futures Consolidate Lower

Arabica coffee futures closed lower Thursday at the end of a very slow session. The most active contract for September delivery, settled 120 points lower at 180.85 cents a pound. The volume decreased to 10,379 lots, the lowest so far this year.  After yesterday’s rally, speculative profit-taking put some pressure on the prices; however the action did not provide enough incentive for speculative short participation.  With regards to the weather in Brazil, cold fronts remained to move  far south of the coffee growing regions posing little to no frost threat.  Brazil exports during the first six months of the year are likely to be between 17.0 million to 17.5 million bags, or 15% higher than last year, according to CECAFE. The increment is attributed to the sale of large stocks built up last year as a result of falling prices. 

 

London - Another stock update after the close tonight and with the grading we have recorded then it will be expected to increase again from the current 5,973 lots we carried on the 12th June. Grading’s have been averaging around 80 lots a day so we push above 1,000 approved in June so far. After a good volume of “Against Actuals” posted yesterday the market expected to record a decent reduction in the working exposure for the spot month. Pressure to get the spot month open position sorted out before we enter the delivery period starting next Tuesday dictates the action. Over 3,400 lots of AA are posted in September boosted morning turnover which appeared to be part of organising exposure before the close of the first half of the year. Working positions in July was down 2,567 lots yesterday leaving an opening balance this morning of 14,377. This suggests we have a lot of sorting out in the next 2 days. The overall open position recorded limited movement down 210 to 95,283. Prices did well but volume was still lacking with the board holding a settlement above the 2025 area in September which changes the technical picture as we look towards month end.