Daily Coffee Market Outlook

NY- Sell (1)- Volume in NY has been lacklustre over the last few sessions and this was especially evident yesterday in early trading. As the dollar took a hit, so did the 'C' (amongst commodities as a whole), with March falling to as low as 137. However, into the afternoon buying picked up, but it was not enough to stem the downward tide thus leaving March et al over a cent down on the day. We see further declines likely accross the board today, but as a cautionary tale, certified stocks are at a 7 year low, highlighting the demand for spot coffee. As we near the end of month and looking ahead to first notice day in March, perhaps this will lend some semblance of support to the market. To the downside, support now appears at 137, followed by 135 and 133. To the upside, 140 looks to be important, and the market will need a close above here going into month end if it is to prevent further long liquidation.

Liffe- Sell (1)- LDN followed NY lower yesterday as it too suffered from disappointing volume. The greenback was the overriding driver as early USD strength led to a wave of selling on the opening that was only recovered somewhat late in the afternoon prior to settlement. The momentum appears to remain on the downside, although lack of interest has probably halted any significant moves; technically speaking, on such low volume, it is difficult to make any meaningful conclusions as to future direction. It is clear however, that for the next few sessions at least, the dollar will play its part, and so long as March remains below 1400/1425 going into month end, the trend is rooted firmly south. Support remains at 1320 and 1295; supply at 1380, 1400 and critically 1425.