Coffee futures - Google News
Friday, October 19, 2007
Now the question is: how much rain? Will it be enough for an healthy coffee flowering season?
The December Arabica Coffe futures contract in NY was hit by a wall of sell stops with speculators reducing their huge position (42K net contracts long as of October 9): I think that during this week sell of speculators could have reduced by at least 10K contracts their net long holdings, that means the Coffee market could now be less vulnerable (after all it lost 10% in 3 days) but I seriously doubt it can climb back to last week highs: speculators are still too long on an historical basis, I expect coffee to stabilise around current levels (i.e. 1.25) for the next few days waiting for a clearer picture on the status of the next Brazilian crop after these days' rain.
Monday, October 15, 2007
Last Friday ICE December coffee futures tested again the 140.0 level and finished on a strong note on Brazil dryness worries and lack of Brazilian producers selling pressure due to a Brazil national holyday. Also, Friday evening latest COT report suggested that spec long position are getting close to an all time high. Brazil held one million bags of beans in official stocks as of September, the
lowest on record, the agriculture ministry said Wednesday (Brazilian producers seem to take advantage of higher prices to export as much as they can), in the meantime ICE certificated coffee stocks stands at an healthy 4.513 million bags level (suggesting US roasters are waiting for lower price to buy). Monday morning ICE December coffee futures are down sharply at -5%: it seems that some rain in San Paulo during the w-e forced some speculator to sell: in an extremely long spec market stops can be hit resulting in sharp sell off like this morning.
Thursday, October 11, 2007
Wednesday, October 10, 2007
Monday, October 8, 2007
The market opened sharply higher and got close to the contract high of 141 but closed in the session's mid-range.
San Paulo Arabica Coffee (December) future touched an intraday high of 169.7 getting very close to the contract high of 170 but closed in the session's mid-range around 168.
Traders continue to watch weather forecasts in Brazil coffee-growing regions: the market is long and near to its contract highs and 10 years highs, the next sessions wil likely see increasing volatility: the market could break the next resistances and set new contract highs as well as could be caught by surprise and sell off if rain arrives in Brazil and forces spec longs to reduce their long holdings (Spec long positions are close to historical highs accordingly to the latest COT report released last Friday).
Readers of Value Area Trading Newsletter will receive soon by email a market and strategy update on December Coffee Futures.
Monday Oct 8, 2007 bulletin: weak and localised rain areas in North of Paraná and São Paulo State. Significant rain able to cover the coffee water deficit is not expected . In Minas Gerais and Espírito Santo weather is expected to remain dry till Oct 14. Weather forecast are changing day after day and need to be continuously monitored. Forecasting models expect significant rain in the Coffee producing regions from October 18.