DJ ICE Coffee Review: Quiet Range Trade

ICE Futures U.S. coffee futures ended at marginally firmer levels Monday, after a light volume, range-bound session. No fresh fundamental news emerged to drive prices significantly in either direction, which left price action consolidative. Most-active ICE September coffee closed up 50 points at $1.2445 a pound.

« The market is consolidating last week’s gains, » said Rodrigo Costa, coffee analyst at Newedge. He noted that origins have been sidelined amid a lack of selling interest. « Brazil is on the sidelines, especially because the real is getting stronger. Producers are not willing to sell. They are waiting for better prices, » Costa said.

Hernando de la Roche, managing director at Hencorp Coffee, added « it is very quiet. There is no news. It is a typical summer slow market. » De la Roche saw ICE September coffee stuck in a near-term range between resistance at $1.2550/1.2700 and support at $1.2100.

In the news, Colombian coffee growers reacted with surprise and cautious optimism Monday to the looming change in the industry’s leadership following the resignation of the country’s top coffee official. Gabriel Silva, general manager of Colombia’s National Federation of Coffee Growers, or Fedecafe, has been appointed the Andean country’s new defense minister, President Alvaro Uribe’s press office said in a statement Monday.

Elsewhere, global robusta coffee producers are planning to put in place a set of cupping-and-grading standards in a bid to boost the quality and value of the variety, trade officials said Monday.

The Uganda Coffee Development Authority said that by developing an internationally recognized system for cupping and grading robusta coffees, robusta-producing countries will have an opportunity to differentiate their coffees in the global market and improve their selling prices. Uganda is Africa’s largest robusta coffee producer.

ICE futures volume was estimated at 5,270 lots, and in options 2,499 calls and 880 puts traded as of 1:30 p.m. EDT, according to the exchange.

 ICE                   Change                      Range
Sep      $1.2445           +50                  $1.2500-$1.2290
Dec      $1.2755           +50                  $1.2800-$1.2620

Source : FutureSource