Daily Coffee Market Outlook

NY- Sell (1)- Following the dollar has been the order of the day of late and (rather boringly), it was the greenback that set the tone yesterday as March 'C' was unable to make any sustainable gains, settling down 2 cents for the session.We see the prospect for more of the same today as macro developments lead the global markets; as Greece teeters on the brink of bankruptcy, its future in the hands of the ECB or further, the IMF, the European community holds its breath. Yesterdays apparent acceptance by the European Commission of Greeces pledge to lower its budget deficit to under 3% by 2012 lifted the Euro- we will need more follow-through today and dollar weakness on the whole to lift the commodity complex significantly. Resistance lies at 133 and 135; with the trend firmly set downwards, a breach of both levels is needed to ensure a break of 130 and resulting freefall is not realised. We remain bearish unless there is a close above the former. Below 130, next resistance lies at 128 then 123.50.

Liffe- Sell (1)- The board has lacked volume of late and yesterday was no exception as the majority of spot month activity was driven by the switch. March now finds itself reasonably settled in the low-mid 1300 range, and without meaningful involvement from market players, this trend looks set to continue in the short term. The lower end of the range appears to be demand arriving at the 1315 level, resistance and healthy supply coming in at around 1350. What LDN needs it seems is some large movement in the greenback or important macro developments to rekindle spec and fund interest; developments that are not forthcoming at the moment. Amid the circumstances, we choose to remain bearish, if anything following the January trend. Resistance appears at 1350 followed by 1400 1380 0and 1400/1425 (key). To the downside, 1315 and 1295 (key) are support.