Morning Comments for July 22

 

The currency markets are likely to be looking towards the year on year inflationary updates for the States in June which will be released later today. Expectations are unchanged from the previous month at 2.10%. Some analysts are suggesting an increase. Oil was a dollar higher to close at $104.14 with Gold up almost $4 an ounce at $1,315 with the CRB ending the day at 298.27 below the important 300 marker as we look towards month end next week.

 

Volume in New York was low again just over 13,000 lots. Prices did probe lower which pulled in an array of short selling as levels tested below the 170 area in September. The action created a vacuum from which levels bounced well into the last third of the session to record minor gains in the day as levels operate back into the recent range. Stocks continue to rise as reflected in the recent GCA update and the certified stocks hold around 2.50 million bags. Little to no news from Brazil as the harvest moves on with the general perception yields are between 10/20% lower but little supporting information. Prices are soft and export numbers impressive during the low consumption period. The market continues to take on this negative blanket looking for opportunities to sell rallies. Arbitrage has been important as the premium rallies back above 80 cents bases September will take over spot position today after the expiry of July yesterday which opens a downside gap!

 

London could not take advantage of the rally in New York Friday struggling to gather any upside momentum into the session but at least holding the 2000 marker which maintains the upside interest. The open position continues to work lower with a decent open position in July to be watched being over 2,000 lots. Coffee has been re-tendered last week which softened concerns and helped settled the structure for the moment. Origins have provided overhead interest but are slow to react to the hesitation in the recent rally. Arbitrage shorts could become an issue as the premiums moves wider which accounts for a decent long for London over the last few weeks.

 

 

By Mark Brown / Int'l FC STONE