As much as I am impressed by this market, I cannot help but wonder why London’s strength in Robusta didn’t contribute to a retest of the 118 level in NY’s July Arabica. Obviously they are two separate markets and two different commodities, but the two should be more than just cousins. When one leads the way so significantly, the other should put in a better following, but that has been happening for a while….. I was impressed that July held the 116.20 pivot level when challenged, but I truly thought 118 would be visited, especially after the London close. London closes at 11:55 NY time, allowing for outcry trading to trade for another 35 minutes.
Perhaps options expiring on Friday have something to do with it.
Anyway, NY is looking at 117 in july e-trading as I write this. So far the high has been 118.15 and the low 116.70. London is showing 1827, + 13.
I expect that we should make an effort at 118 again, if it fails, either by getting there and not probing for stops above 118.40 then backing off, or finding contentment that it made it there already today and moving lower, then the key for me will be how July treats the 116.20 level.
A reminder that there will be no comments Thursday and Friday, as I will be attending my son’s wedding and traveling. Ray will of course be available and able to assist you.
A break of 116.20 may disappoint the bulls, but only a break below 113.70 would get me to liquidate longs. A close above 118.90 should be greeted with a move to 121-122.
What I find most interesting is that the 15 year data mentioned earlier in this report last month (that each year of the last 15 years coffee prices decline between May 22nd and June 26th), looks to be not following the plan.
I still favor owning long Sep and Dec call spreads.
July futures settled outcry at 116.55, so values look to open outcry 50-60 better.
Support: 116.20, 114.95, 114-113.70,
Resistance: 117.50, 118.90, 120-121. 122.
Daily Pivot: 116.35
Technical: up trend looking higher
In July the 9 day moving average is 113.41. 18 day 111.38 the 40 day 109.93
Today’s trading: Look to see how July reacts to a test of 116.35 or 118.
The Information and opinions contained herein comes from sources believed to be reliable, but certainly not guaranteed as to accuracy or completeness. No responsibility is assumed with respect to any statement, nor with respect to any expression of opinion herein contained. All views are the opinions of the author at the time of writing and are subject to change without notice. No statement should be construed as an offer to buy or sell a commodity. This publication is for information purposes only.
Jurgens Bauer for NYBOT Options
trading floor: (212) 748-3898