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.

Daily Coffee Market Outlook

NY- Sell (1)- As has been so often the case, yesterdays' session can be described in terms of the USD. The greenback was on the back foot in morning trading as the Euro rallied after the news that the demand for Greece's 5-year bond offering was reportedly four times more than the government had reckoned with. However, it does not seem to be that much of a surprise given that the 'good fortune' came at a price of a 6.5% coupon payment. Perhaps the market took note of this later on as the dollar bulls sniffed blood (and the fact Greece's public debt is expected to reach 120% of GDP next year). NY followed suit with morning gains reversing in the afternoon and March finishing just below unchanged. Importantly, March closed below the 140 trigger and this indeed leaves the market still exposed to the downside. Following a disappointing UK GDP first estimate, coming in below forecasts at 0.1%, we see potential for further USD gains and 'C' market weakness. To the downside then, support resides at 138.50, 135 and 133. To the upside, 140 is a key settlement resistance level followed by 142.5.

Liffe- Sell (1)- LDN experienced an aggressive opening to the upside as stops were seemingly uncovered (possibly spec driven) and March climbed $25. However, the move was seemingly over before it even began as the board fell $10 in a heartbeat and origin interest had its claws out. Following the disappointing UK GDP first estimate and associated stronger dollar, we see potential (again) for a move to the downside. Yesterday, LDN failed to hold on to any noticeable gains built over the last few sessions, and with the important 1400 and 1425 levels quite a way off in the distance, it would take some brave longs to re-enter the market. To the downside, support can be found a little way down at 1320 and then 1295. To the upside, 1400 and 1425 remain the key supply points.

Daily Coffee Market Outlook

NY- Sell (1)- NY has suffered at the hands of a strengthening USD for the past week but Friday saw a turnaround with the 'C' staging a small recovery and closing up just under a cent. The talk of the market this year has been the pressure experienced by roasters to cover their 2010 commitments on the back of strengthening washed coffee differentials and a reasonably bouyant terminal market; last weeks decline will have given them some relief as they were able to buy the term and average on the way down. Technically speaking, NY is still fairly weak and we see the possibility of another fall back towards the mid 130's. However, the greenback is likely to play its part and any notable fall in the dollar will lend some support to the coffee market. Resistance then can be found around the 140 zone, 142.5 further up. To the downside, key support remains at 135 and 133.

Liffe- Neutral- Fridays short squeeze took us by surprise somewhat as Ldn, bouyed by a falling dollar and rally in NY climbed and closed $33 up on the day, erasing much of last weeks losses. March managed to close above the important 1350/60 level and this could provide some rest-bite from the current downtrend. A weakening dollar is likely to lend some support and may even encourage some tentative longs. However, in the mid to long term, a challenge and close above key resistance at 1400 and most notably 1425 is required for a more sustainable push Northwards. We remain neutral today noting support at 1320 and 1295.

Daily Coffee Market Outlook

NY- Sell (1)- NY continued its slide yesterday as 140, once support in March, has become fairly strong resistance and kept a lid on the spot month. The greenback, conversely, is enjoying a continued run of strength, and this has all but halted any attempt for the 'C' contract to claw back losses. In the short term then, with no rest-bite heeded in Europe (overshadowed by Greece et al and problems therein) or elsewhere, this trend looks set to continue and some analysts are calling for the Euro- Dollar at 1.35. With the market capped below 140 for now, and next reliable support at 135, we see the likelihood of further losses in the coming week and retain are bearish strategy; 'the trend is your friend' has proved itself time and again in the 'C' and for now any buying to catch the rebound is much akin to catching a falling knife. Below support at 135 comes 133- a close through here could send March reeling all the way back to the high 120's.

Liffe- Sell (2)- Like NY, Ldn continues to lose ground, and for now, there does not seem to be much chance of it halting. Having plundered through support at 1340, the next reliable support lies at 1295- the 2009 low- and this could be put very much under pressure in the coming week. If 1295 were to be breached, we expect violent stop triggering and long liquidation, and where March goes from here is anyones guess. With Vietnam still looking good crop-wise, the pressure is certainly on and we remain bearish. Levels, as indicated already: support resides at 1315 (weak) and 1295 (key). To the upside, March should be capped at 1340 and 1360.

Daily Coffee Market Outlook

NY- Sell (1)- Despite brief gains to the upside yesterday, NY failed to make any inroads as it battled against a stronger dollar and reasonably strong resistance at 142.50. Perhaps discouraged by the failure to peak resistance, weakness attracted spec liquidation and pushed the board back to around unchanged before more sellers jumped on the bandwagon to push March towards Fridays lows. Failure to breach 142.50 following Fridays aggressive sell-off is likely to keep ICE 'C' on the back foot today as longs re-assess and look to the dollar for inspiration. We remain bearish and look for a break below 139/140; this then opens the way for losses to 135.50. To the upside then, 142.50 will need to be breached before traders look to get long once more.

Liffe- Sell (2)- March failed to make any noticeable headway above 1380 yesterday confirming many traders opinion that the only way is down in the short term. Low volume was the order of the day, the bulk of which was made up of AA's, and this was possibly the reason for lack of any discernable movement. In light of no further market developments, we see the prospect of further losses today, despite the market only closing down $3 in the last session. The dollar is beginning to look reasonably strong, particularly against the Euro which is getting battered on all fronts; this should all work in the bears favour. March then should remain capped under 1380, the first target on the downside being 1360. Once breached, this opens the door for looses to 1340 and 1295 (key).

Daily Coffee Market Outlook

NY- Sell (1)- Following yesterdays market holiday, nothing in the way of fundamental or macro data was released in order to cause any sizeable correction today. As we described in our report yesterday, the January momentum appears to have come to an end, for the short term at least, and March teeters above support at 138/139. The challenge now is for ICE 'C' to launch another assault of resistance around 146 and then the 2009 high of 149.50 can be contemplated once more. Until then, we are bearish below 142.5 and look for further downside action.

Liffe- Sell (2)- Yesterday was somewhat of a non-event as volumes were disappointingly low on the back of the US holiday. To draw any conclusions from yesterdays price action would be futile and as such we remain bearish and look for losses below 1380. Key technical resistance levels remain at 1400 and 1425, and a clear break is needed of both to avoid somewhat of a retracement of Januarys' gains. To the downside, support lies at 1360, 1340 and 1295 (key).

Daily Coffee Market Outlook

NY- CLOSED- NY gave back a large part of Januarys' gains on Friday as dollar strength and origin selling triggered stops below the 142.50 level. The upward momentum then has certainly been curbed in the short term and it will be interesting to see what the week holds in store as March lies just above resistance at 138; a dip through here could send the contract tumbling with lots of stops likely below the 135 and then 133 support levels. NY is closed today for the US Martin Luthor King annual holiday but will re-open as usual tomorrow.

Liffe- Sell (1)- Following Fridays fall on the back of USD strength, we adjust our outlook to sell. Crucially, despite impressive January gains, the market couldnt breach key resistance at 1425 following a number of attempts. Technically speaking this was a bearish indication, a 'quadruple top' having been formed, but following days of sideways action last week, it was on Friday that the sellers came to the market in earnest. We look now towards 1360 support, with 1380 and 1400 providing resistance and inevitable supply. Despite some downside momentum, working in LDN's favour is the current physical market situation where there is a lack of flow of new coffee and tight differentials leaving certs. looking attractive. It will be interesting to see how the situation develops in a month or so as we get towards first notice day in March. Volume should be reasonably light today due to the US market holiday.

Daily Coffee Market Outlook

NY- Neutral- Volume was reasonably low yesterday and the day choppy with no real identifiable pattern. What is apparent however is that there is clear interest around 143 in March, as any dip towards here over the last week has met with fairly robust demand. Talk of nearby demand in the physical market is most likely the driver as shorts look to cover their commitments. In light of the last few sessions, we refrain from strategy today, noting support at 143 and 138 and resistance at 146 and 148.5. ICE 'C' is closed on Monday for the US Martin Luthor King Day.

Liffe- Neutral- The market was capped once more in March as sellers knocked values back below 1400. As March drifted back towards the weeks' lows, the 1380 support did its job, and spec interest dragged it back towards unchanged in the afternoon session. We expect more of the same today as traders wait for any significant action around support at 1380 or resistance at 1425. US Dec CPI is released today, any surprises likely to influence the dollar. In light of this, we retain our neutral stance noting the aforemention support and resistance and waiting for a breach of either to dictate our next move.

Daily Coffee Market Outlook

NY- Buy (1)- NY managed to consolidate and continue the upward path that was started on Friday. A weaker USD aided the move and March was able to close above a notable supply point at 145. We see the possibility of further gains in the near-term, as short-term specs are encouraged by the close above 145 and attempt to jump on the bandwagon. The ECB interest rate announcement announcement and press conference may give traders some food for thought as any resulting EUR/USD moves could influence ICE 'C'. Resistance stands at 148.5 and 150; to the downside, 142.5 and 138 are your supports. 145 will be todays key level to watch.

Liffe- Neutral- Ldn was caught in a very tight range yesterday as volume remained though and traders appeared to be disinterested. March failed to close above the important 1400 pivot which could prove to be an important development. If the market is to sustain the rally, a decisive break of 1425 is required before longs begin to liquidate and short specs smell blood. As such, we decline to suggest a strategy today; however, the market has begun to feel heavy this week following the failure on Monday to breach the 1425 zone and so we are beginning to turn bearish. Resistance then appears at 1400 followed by 1425. Support lies at 1380 followed by 1360 and 1315.

Daily Coffee Market Outlook

NY- Buy (1)- A reasonably quiet day in NY yesterday as the market traded within a very narrow range. The bulk of the flow was dictated by the USD which reacted negatively to Alcoa's poor results kicking off the earnings season and the Chinese decision to raise bank reserves, prompting fears that Chinese demand may decrease as a result. We retain our bullish stance today if only on the expectation of further falls in the greenback; with nothing in the way of macro data or fundamental news of note, we await the ECB rate decision and press conference tomorrow for hints as to further USD developments. Resistance appears now at 145 followed by 148.5 and 150/151. Support resides at 142.5 and 138.

Liffe- Neutral- Volume was fairly light accross the board yesterday as LDN managed to recoup some of Mondays losses. However, March remains capped at the important supply point of 1400; and with positive news coming out of Vietnam regarding the flow of coffee, there is a real possibility of it holding here in the short-term. As such, we choose to remain neutral today, awaiting a clear break of 1400, and most importantly, 1425 before embarking on a bullish strategy once more. Like NY, we see a reasonably tight range of between 1380 and 1400 in the coming days. Resistance then lies at 1400 and 1425. To the downside, we see support at 1380, 1360 and 1315.

Daily Coffee Market Outlook

NY- Buy (1)- NY enjoyed gains early on yesterday, spurred by the weaker dollar anf Fridays encouraging close. The Fed's Bullard added fuel to the greenback shorts as he said that interest rates may remain low for some time. This was followed by the Atlanta Fed's Lockhart who reiterated this suggesting the US rebound will require low interest rates until it shows momentum. Futures reflect an 8% chance of the Fed raising its target overnight rate to 0.5% in June, down from a 47% likelihood 1 month ago. However, the rally was short-lived, pushed lower by spec sellers who managed to uncover stops (most likely from other specs) on the way down, aiding the move lower. Today we remain bullish despite yesterdays set-back, as long as March holds on to gains above 142-143; a dip through Fridays gains could be a signal of weakness to come. Resistance remains at 148.5 and 150. To the downside, we see support at 143.50-142 and 138.

Liffe- Buy (1)- Aided by NY and the weaker dollar, LDN gapped higher on the opening to capitalise on last weeks gains. However, traders were unable to maintain the momentum as the 1425 resistance zone lurched into view and with it, attracted enough origin selling to put on the brakes. This was then aided by reports of increased origin selling in Vietnam. The fact that London has failed and turned lower after reaching this key resistance at 1425 (for the fourth time) does not send positive signals to the market. However, further dollar weakness today and subsequent breach of 1425 could help it on its way to 1500 sooner rather than later. As such, we remain bullish today (although not quite as confidently), and note support at 1360, 1315 and 1295. Our target remains as a close above 1425.

Daily Coffee Market Outlook

NY- Buy (2)- The US non-farm payroll data on Friday disappointed analysts by completely undershooting even the most pessimistic of forecasts. The markets knee-jerk reaction to the data was a sell-off in equities, a bond rally and dumping of the greenback, all contributing to the rally seen in ICE 'C'. However, it then became apparent to market participants that the US stimulus programme will likely have to be prolonged, and following that line of interpretation, stocks were then bought and bonds sold; the dollar however, remained sold, and 'C' remained on the front foot. As expectations that the FED will hike rates have been shifted further into the future, the likelihood that the greenback will gather momentum in its' decline looks strong, highlighting the fickle nature of todays market. As such, we see potential for further gains accross the board and note the 145 zone as a critical one. Specs have driven March over 145 on the back of this dollar slump and subject to it being able to hold above this level at settlement today, the onus really is on the bulls taking firm control. 148.5 is the next target on the horizon, while 145 and 141 are the nearest supports.

Liffe- Buy (2)- Ldn continued its' recent run of strength on Friday following the disappointing payroll figures and dollar decline. March managed to close on our key resistance level of 1400, and this should serve to encourage further system buying and short covering. Pending further dollar weakness today, March looks set to challenge the 'triple-top' at 1425 as momentum reverses now to the upside. A break here, and 1500 becomes the next upside resistance target. Support lies at 1380 followed by 1360, 1315 and 1295. This 1400 level is likely to serve as the main focus early on though as the shorts cling on.

Daily Coffee Market Outlook

NY- Neutral- A quiet day yesterday in NY as the dollar regained some ground and the commodity complex as a whole stalling, ICE 'C' struggled to make headway. Most likely, the thin volume comes pending todays Non-farm and US unemployment numbers, arguably the key events of the month. Following Decembers improved numbers, analysts and traders are looking for further gains and an indication that the US remains on track for a better 2010. Although positive numbers will equate to an improvement in risk-appetite, this may not necessary relate to gains in 'C'- the dollar has not been sold of late as a risk play as traders get to grips with yield implications- as such, if the greenback is BOUGHT on a better number, this may well cap any possible rally in NY. As such, we remain neutral today awaiting the post-number flurry. Support remains at 139/140 and 135.5. Resistance lies at 142.6, 146.5 and 148.

Liffe- Buy (2)- On the whole, Ldn has managed to outperform NY this week and yesterday was no exception as robusta's remainbouyed by the tight physical situation and perceived undervaluation. Alas, March remained above 1380 and traders will be eyeing first resistance now at 1400 and further strong supply at 1425. Today could be key to unlocking the doors to the upside following the US unemployment numbers, and with all eyes North in Ldn and analyst expecting better figures, we see the likelihood of more Liffe gains. To the downside, support lies at 1360, 1315 and 1295. Resistance then lies at the aforementioned 1400 and 1425 levels.

Daily Coffee Market Outlook

NY- Buy (1)- NY struggled to match Ldn's enthusiasm yesterday as the range remained tight and gains limited. The Brazilian Real played its part as it strengthened against the dollar capping the 'C' but the market did find fresh interest as prices dipped towards the 140's. Despite lack of volume (and interest), NY looks set to hold onto recent gains in the short term as physical availability and large industry shorts keep the market supported to the upside. The 140 level should provide support then near term as traders position themselves for a further assault on december highs; at the moment, only a rapidly strengthening dollar will send the market dipping aggressively southwards once more. Supoort then will be found at 139/140, followed by 136 and crucially 133. To the upside we see resistance at 146.5 and 148.

Liffe- Buy (2)- London put in a reasonably impressive performance yesterday and managed a close above first resistance at 1380. Speculative longs appeared to drive the market perhaps looking for a near term challenge of the elusive 1425 area. Today the recent downtrend will pass through 1489 which may provide somewhat of a cap; 1400 looks to be stronger resistance however and will need to be convincingly overtaken to give players the impetus to challenge 1425. Support appears today at 1360, 1315 and 1295. Resistance abounds at 1389, 1400 and 1425 (key).

Daily Coffee Market Outlook

NY- Neutral- Following the festive break, Mondays rally appeared to take traders by surprise as shorts scrambled to cover and funds continued their average buying. Yesterday came as a disappointment then as ICE 'C' failed to continue the rally and stalled at the top of Mondays' intraday range, drifting back to close almost 1 cent lower. The dollar will likely be a key driver of the market looking forward to the next week or two in setting a tone for the commodities markets as a whole. Its weakness on Monday, coupled with higher oil driven by the cold snap accross the USA and Europe looks like it will be a temporary phenomenon; most commentators now are calling for further gains in the Greenback as the balance of power shifts to the US and yield considerations come into play. With this in mind then, we feel Mondays rally may have just been a flash in the pan. Resistance looks fairly strong at the 50% fib retracement (142.65) coupled with the 20 day moving average (142.50). In the short term then (at least until non-farm unemployment numbers on Friday), we see March capped at resistance while maintaining a tight range between here and support at the 139 area.

Liffe- Neutral- Ldn struggled yesterday alongside NY as the market lacked momentum to capitalise on Mondays' gains. Disappointingly, March failed to close above the 20 day moving average at 1365 to give traders the impetus for an assault of key resistance at 1380. Without a close above the latter stability hurdle, the downward pattern looks set to continue. 1315 followed by 1295 are the next support levels. Resistance, as mentioned, resides at 1365, 1380 and more crucially, 1425.