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Daily Coffee Market Outlook

2010-03-23T01:35:00.000-07:00

NY- Neutral- The 'C' continues to be dictated by the whims of the greenback and yesterday was no exception. With the macro picture driving things, todays US housing data could be important; otherwise, very little else to report with May continuing to range between the 130 lower border and 135 supply point. We expect much of the same today and thus remain neutral. A breach of either border is needed for any sustainable developments in NY.

Liffe- Buy (1)- Despite predictions to the contrary, LDN is stubbornly hanging around the 1380 level in anticipation of a possible move to the upside. Origin selling has not shown itself despite the steady grind upwards and LDN has remained remarkably resilient to the movements of the USD hinting at further gains to come. Last weeks performance and continuation yesterday will have bouyed the technical outlook and thus we look for more gains today. 1300 appears to be the key upside level with 1280 providing interim resistance; with both levels breached we see little to stop a charge towards 1340. Conversely, a afilure at 1280 and slide downwards today will leave support at 1250 exposed once more.

Daily Coffee Market Outlook

2010-03-22T01:46:00.000-07:00

NY- Neutral- The backdrop of a stronger dollar accross nearly all the majors sent NY tumbling on Friday as recent spec longs liquidated and origin joined in the selling. Of late, its seems every time the board makes a sustainable move upwards, it comes crashing back to reality, in effect, mirroring developments in the global macro recovery. While May is trapped in the 130-135 consolidation zone we choose to remain neutral; action is likely to remain muted until later in the week with US retail sales on Thursday and GDP/Univ. Michigan Sentiment indicator Friday.

Liffe- Sell (1)- Despite clawing back some recent losses last week, LDN was unable to make a sustainable break above 1280/1300. Friday saw the market capped due to a resurgent USD and lack of any really 'big' players going long has ensured gains have not been dramatic. Following the failure to breach 1280, we see the prospect of losses likely, ad watch for spec liquidation below 1250. 1200 remains the bear target to the downside and should provide some semblance of support. 1280/1300 remain the supply points.

Daily Coffee Market Outlook

2010-03-17T01:08:00.000-07:00

NY- Neutral- NY remains rangebound between the 130 and 133.50 levels. Following last nights FOMC meeting and subsequent pledge to keep rates low, we see the prospect of small gains accross commodity indexes; however, the impact in the 'C' should be relatively muted and with no fresh fundamental coffee data the range in May should remain intact. To the upside, should the 135 area be challenged, this could elicit short covering and trigger stops to 137/138- but don't hold your breath.

Liffe- Neutral- Like NY, LDN appears to be stuck in a range between the 1200 and 1250 levels. The Vietnamese stockpiling rumours appear to have hit a 'sceptical impasse' as traders demand 'evidence' of the plan going ahead. The FOMC pledge should give LDN a semblance of support but not enough to break the current range. We remain neutral for the short-term, and look for a range breakout at 1250 and subsequent challenge of the 1280/1300 resistance zone before abandoning our longer-term bearish outlook.

Daily Coffee Market Outlook

2010-03-16T01:32:00.000-07:00

NY- Sell (1)- A stronger USD and less than encouraging murmurs from China regarding interest rate increases sent the 'C' lower yesterday. However, Despite a brief probe below 130, the bears were not able to keep May below the lower support zone and the contract settled around 131. Today the onus remains on the downside. However, with the FOMC interest rate announcement due this evening, expect volumes to be low as traders pause in anticipation of what Bernanke has to say in terms of future direction. 130 should remain in support while 135 followed by 137 should cap the upside.

Liffe- Sell (1)- Early trading yesterday witnessed further losses as May made a charge for the 1200 bear target. Momentum was stopped short however as LDN recovered from the lows to close only a couple of dollars down. Momentum is still to the downside despite the bear 'failure' and we look for further losses today. The FOMC rate announcement this evening should ensure light volume and keep any movements muted.

Daily Coffee Market Outlook

2010-03-15T01:48:00.000-07:00

NY- Sell (1)- NY failed to hold the 'high ground' on Friday as May closed below the 133.50 stability level despite posting fresh highs early on in the session. Concensus emerged over the weekend that Chinese premier Win Jiabao may take steps to cool economic expansion by raising rates following higher than expected inflation figures. Similar thoughts emerged from India, sending emerging market indices lower overnight. This is bad news for global markets as whole, especially commodities that have risen sharply over the last year fuelled by Chinese expansion. As such, the 'C' should retreat somewhat although the lower end of the consolidation at 130 is unlikely to be breached. 135 will provide a cap to the upside for now.

Liffe- Sell (1)- Upside developments arising as a result of the Vietnamese stockpiling plan appear to have been put on the back-burner for now as LDN resumed its downtrend at the end of last week. Failure to breach 1280/1300 has sent May Southwards as any hopeful longs liquidate and bears re-instate their positions. Developments emerging from China and the East should put the brakes on any upside potential today and as such we return to our bearish stance barring any more Vietnam rumours. Traders are likely to have their sights firmly on 1200 over the next two sessions and it remains to be seen how much demand will arise there.

Daily Coffee Market Outlook

2010-03-12T01:21:00.000-08:00

NY- Buy (1)- An uninspiring session yesterday saw NY close 1 cent higher on low volume, driven primarily by the USD. Macro data from Europe this morning may give some direction as Industrial Production numbers jumped by the most in 20 years. This should help soothe some of the periphery fears and give some strength to the Euro. From a technical perspective, the door is open now for a challenge of the 137 zone in May, with the contract having closed above 133.50 last night. Coupled with a better macro outlook and weaker dollar this should all work in its favour. To the downside, 130 still remains the lower consolidation zone floor; it remains to be seen whether 133.50 can lend any worthwhile support.

Liffe- Neutral- Disappointing volume and market activity in LDN yesterday came as a result of Vietnam stockpiling uncertainty. Amid such a backdrop, it is difficult to gauge any real direction and technically speaking, the last few days trading have not been particularly significant for the chartists. As such, we choose to remain neutral for the time being, noting that any breach and close of resistance at 1280 and 1300 could signal an end to the downtrend and potential medium term reversal. To the downside then, the bears will still be targetting the 1200 support.

Daily Coffee Market Outlook

2010-03-11T01:20:00.000-08:00

NY- Neutral- The 'C' couldn't quite capitalise on Tuesdays gains yesterday with the board finishing broadly unchanged. However, sentiment does appear to be changing somewhat as traders discuss upside potential rather than the next leg lower. Despite the failure of May to close above 133.50, there is certainly room for further gains if the USD can give the board a helping hand. The next target once 133.5 is convincingly breached lies at 137-138. To the downside, strong support and the lower end of the current sideways trend lies at 130.

Liffe- Sell (1)- Many commentators are beginning to turn slightly bullish of LDN following Tuesdays rally and an improving technical picture. The stockpiling 'rumours' coming out of Vietnam are certainly making shorts think twice. However, yesterday proved just how difficult it is/will be to completely reverse the downward trend- and on an intra-day basis, we still see the prospect of further falls until the stockpiling scheme gains more substance and we see a convincing close above 1280/1300. The target remains for us at 1200 on the downside, but we'd be willing to mark an about turn should things develop in Vietnam.

Daily Coffee Market Outlook

2010-03-10T01:34:00.000-08:00

NY- Neutral- As expected, the Greenback dominated proceedings yesterday, initially causing a sell-off before weakness in the USD going into the afternoon triggered spec buying and short covering above 133.50. However, from a technical perspective, May failed to close above that key resistance at 133.50 despite breaking through, and this will leave new longs unsure of their strength. We see the potential for more consolidation between 130 and 133.50 today (rather boringly) but keep our eyes northward in case of a further push toward 137/138. USD weakness following ex EU commissioner Prodi's comment that Greeces' financial crisis is over and the rest of the region is safe' may have an impact early on but more likely will be discounted as 'noise'.

Liffe- Sell (1)- Initial weakness yesterday turned into strength as rumours began to circulate that the Vietnam coffee association might be serious about its coffee stockpiling plan. Shorts scrambled for cover as specs tried to capitalise on the upswing sending May up $23. Although stemming the recent slide, we don't see yesterdays uptick as having any sizeable ramifications or marking a turnaround in sentiment, and look for a resumption in selling. May will need to break 1300 in order to stem the recent trend and this will require further USD weakness. 1200 is our downside target in the short to medium term.

Daily Coffee Market Outlook

2010-03-09T01:12:00.000-08:00

NY- Neutral- Despite weakness in London, NY remained remarkably resilient yesterday and managed to post gains of just under a cent. May continues its' sideways pattern between 130 (which is proving to be strong support) and 133.50. There is little in the way of macro data due for release Tuesday, and so we retain a neutral stance. The USD, although having taken a bit of a back seat of late with the 'C', should dominate proceedings today.

Liffe- Sell (2)- The slide in LDN continues and specs, hedgers and funds continue to sell on the back of the downside momentum. May managed to settle below the technical target of 1226 yesterday, opening the doors to further losses; however, as we plough through uncharted territory with lower contract lows, where this slide will halt is becoming a guessing game and will likely turn due to wider macro developments. With no support of mention to the downside, resistance lies at 1280 and 1300; settlement above the latter required to put shorts in pain.

Daily Coffee Market Outlook

2010-03-08T01:27:00.000-08:00

NY- Neutral- Friday presented a rather non-descript day once more despite positive non-farm payroll data supporting the USD. May managed to hold above support at 130, just about maintaining its sideways pattern. We see the prospect of holding above 130 likely once more as comments from Sarkozy gave the strongest hints yet that the EU will in fact support Greece if it struggles to fund its budget deficit, arguing the country was 'under attack from speculators'. This is a positive for the Euro and has seen the dollar fall against all major currencies overnight and investors plough into the 'risk trade'. Below support at 130, the next level is 124. To the upside, resistance lies at 133.5 and 137.

Liffe- Sell (3)- The mood for robusta's remains very firmly to the downside as origin and spec selling continue. Fundamentals also hint to the downside as Indonesian coffee production was reported to have risen sharply. Despite a weaker dollar, very little else lies in the way of further declines and as such we remain bearish. With May having clearly broken the 1250 support, the next technical target lies at 1226, and the likelihood of reaching it today is high. To the upside, resistance is way off in the distance at 1280 and 1300.

Daily Coffee Market Outlook

2010-03-05T01:50:00.000-08:00

NY- Sell (2)- Yesterdays ECB and BOE rate announcements threw up little in the way of surprises yesterday with both central banks reiterating their current stance. Stocks rallied accross the board following a US report which said jobless claims dropped from a 3 month high, defusing concern that the US recovery is slowing. The USD rallied, inevitably affecting NY 'C' to the downside. The months highlight of US Non-farm data should shed more light on the state of the job market, what the global recovery hinges on. May held just above support at 130 at settlement last night; we expect another challenge today with a stronger USD. A close below 130 will open the door to 124. To the upside, 133.5 and 137 remain the resistance levels.

Liffe- Sell (2)- LDN struggled yesterday following Wednesdays close below the 1280 trigger and a stronger greenback. Amid light volume and lack of buyers, May slid below key support at 1250 before bottom pickers lifted it slightly to settle at 1249. Technically speaking, this should lead to more programme selling, although profit taking by shorts may provide a floor. We see further losses in the short to medium term then, but look to the USD for further guidance. Resistance lies at 1280, 1300 and 1335, but there is little prospect of any of these levels being challenged today.

Daily Coffee Market Outlook

2010-03-04T01:42:00.000-08:00

NY- Neutral- Yesterday heralded a stronger Euro as positive news regarding Greeces rescue plans filtered through the market. However, unimpressive volume in the 'C' left May to settle slightly below unchanged. The tight range between 130 and 133.50 continues, and we see much of the same occurring today. The ECB and Bank of England rate announcements are out today, and this should provide the focus for the USD and commodity markets as a whole. Above 133.5, the next resistance remains at 137. To the downside, a break of 130 would open the doors for a challenge to wards 124.

Liffe- Sell (1)- LDN continues to flirt with the 1280 zone, and yesterday was no different. The market closed up small on the back of low volume as deliveries for March continue. LDN, like NY, is very much in a sideways pattern at the moment, with traders showing very little interest to buy or sell in volume. However, in the medium term, the trend points downward and as such we look for further losses today (albeit small ones). 1300 and 1335/40 remain the upside targets; to the downside, look to 1250 as support. We do not envisage any particular fireworks today unless the BOE or ECB spring some kind of surprise.

Daily Coffee Market Outlook

2010-03-03T01:46:00.000-08:00

NY- Neutral- Another non-descript day in NY as traders looked towards the USD, with the board closing just above unchanged. Today could provide more of the same, as Greece pledges $6.6 bil more in budget cuts to appease its EU neighbours in their support. This should weigh on the dollar and perk up the Euro, possibly lifting the 'C' slightly. In terms of data, figures to watch in the US are the ADP employment numbers and ISM non-manufacturing this afternoon. May levels; 130 and 124 to the downside, 135 and 137 remain as resistance.

Liffe- Sell (1)- LDN continued its journey to the downside yesterday with the board closing down around $15. Weakness appears to attract more traders despite the stability seen over the last few sessions. Position rolling has provided much of the flow as we enter delivery period. With May unable to hold above 1280 or attempt a close above 1300, this momentum should continue towards 1250. To the upside, 1300 and 1335 remain the bulls' goal.

Daily Coffee Market Outlook

2010-03-02T01:36:00.000-08:00

NY- Neutral- Lack of volume was the defining characteristic yesterday and the board closed relatively unchanged despite a big rally of the greenback against nearly all the majors. May remained within the current range of 130 to 133; and with a lack of macro data today, we expect this trend to continue in the short term. Levels to watch today then are 130 and 124 to the downside; to the upside, look for resistance at 133 and 137.

Liffe- Neutral- Despite USD strength yesterday, May manged to close $10 up for the day and hold above the 1280 level. This should add support to what is effectively a 2 month downtrend. Further closes above 1300 are needed to stabilise the market further but significantly, 1335 will need to be broken to turn sentiment north. To the downside then, look for support at 1280 followed by 1250.

Daily Coffee Market Outlook

2010-03-01T01:30:00.000-08:00

NY- Neutral- Once more, it can be noted that coffee is being driven primarily by the USD rather than physical market fundamentals. Fridays rally was helped by the weaker dollar as the Euro attempted to claw back ground. As we look to May, the market has managed to climb above the stability zone at 130, thus halting the decline for now. Below here could see a fall to 124. To the upside, demand should be capped at 133 then 137.

Liffe- Neutral- Shorts were squeezed on Friday aided by month end rolling lifting Mar/May somewhat. As we look to May, The contract has clambered above the 1280 stability zone, and aided by a weaker dollar, momentum might continue to give the market a lift. The next hurdle to overcome is 1300, a break and close here giving longs a breather and maybe a further short squeeze. A break of 1335 remains the target to set sights northward. To the downside, support lies at 1250.

Daily Coffee Market Outlook

2010-02-24T03:53:00.000-08:00

NY- Sell (1)- Stormy seas of late in NY were becalmed somewhat yesterday as ICE 'C' managed to close small up for the day. However, we see this as little more than restbite pending further losses. The macro picture worsened somewhat Tuesday as German consumer confidence dipped, followed by the US consumer confidence measure which continued the trend. EU periphery fears continue to weigh on the market, and the momentum remains firmly to the downside as traders await the next leg lower. We look for a challenge in the short term of support at 128.50 and further, 123. To the upside, 135 should keep a lid on things.

Liffe- Sell (1)- May teeters 'on the brink' in LDN as it seems the whole of the spec community has been jumping onto the current downtrend and daily weakness with all guns blazing. Looking at the open interest and listening to market commentators, the system short position is now at one of its highest levels this year and this looks unlikely to change in the short term as macro developments weigh on the market. Although LDN took a breather yesterday from Mondays slide, we see the prospect of more weakness today, especially should May close below 1250. To the upside, we need a close above 1280 to give longs any form of hope and before shorts start to think about liquidating.

Daily Coffee Market Outlook

2010-02-19T01:34:00.000-08:00

NY- Sell (3)- Inevitably, currency movements were the main driver of the 'C' and commodity markets in general. USD strength in the morning led to a lower 'C', followed by afternoon weakness in the USD culminating in a higher NY. The pattern looks set to continue today in terms of currency 'domination', albeit to the upside in the dollar and downside in NY. This follows last nights decision by the Fed to increase the overnight deposit rate by 0.25% to 0.75%, sending an explicit signal to the market that the emergency supply of liquidity to the markets is done and the aggressive monetary easing cycle looks set to reverse. Historically, the discount rate has been used as a psychological tool in sending signals to the market of future monetary policy direction; and it was something the market has been warned about recently by Bernanke but the shock was in the timing- sooner rather than later. Inevitably, the greenback reacted positively against the main basket of currencies sending the EUR/USD to recent lows. In light of this, we see the only way as down for NY today and remain bearish. Levels to watch on the downside are 130, 128.5 and 123. To the upside, 135 looks to be strong resistance in March.

Liffe- Sell (1)- More of the same for LDN as the USD coordinated proceedings Flow was rather limited in the outrights with most volume arising from the switch. Sentiment appears to be to the downside still as even USD weakness into the afternoon couldnt lift the board much higher than unchanged and origin sellers remained like a cloud over LDN. Following the cut in the discount rate, we retain our bearish stance and see more weakness resulting in the short term. Levels to watch remain 1280, 1300 and 1315 to the upside. Support lies at 1250.

Daily Coffee Market Outlook

2010-02-18T01:25:00.000-08:00

NY- Sell (1)- The USD was the main driver of proceedings yesterday and this does not look set to change today. A woeful day for Europe Wednesday as the UK unemployment disappointed, and further details emerged in Greece regarding a certain investment bank helping massaging its deficit and mislead investors. The latter sent the cat amongst the pigeons once more, further damaging confidence in the Euro and evoking angry reactions from EU members, particularly Germany. It seems at the moment, the EU wants to show that it is behind the peripheral countries without having to put its money where its mouth is. Something must come to a head sooner or later. Euro weakness was excaserbated further as US housing data surprised to the upside and the FOMC minutes revealed the Fed was debating how to unwind some of its housing stimulus measures. Ice 'C' didnt react quite as negatively as might be thought, but the fact that these problems have been around for a few weeks now is watering down their impact. That is not to say however that it is not having an impact at all; last weeks up-swing has been reversed its seems and the possibility of March creeping above the 135 stability point unlikely. We look down then towards support at 128.50 and envisage a challenge here once more in the short-term. Pending a close below there, 123 becomes the next downside target.

Liffe- Sell (1)- Like NY, Ldn is dominated by the dollar (again) and macro developments in the EU. The switch appears to be where the majority of volume is centred, although it seems that some of the Mar/May strength is beginning to wane; possibly due to system funds having finished the majority of rolls needed to be done. We look for further weakness today accross the board and set our sights in March now towards 1250 following the close below 1280. 1300 should provide some sort of a cap to the upside should the USD weaken.

Daily Coffee Market Outlook

2010-02-17T01:20:00.000-08:00

NY- Neutral- The Euro rallied from 9 month lows yesterday as the EU spelled out a tougher stance to Greece with regards to its budget deficit and efforts towards reducing it. Bond holders fears were quelled somewhat reducing the spread between Greek and German government issues thus propelling the market and commodities upwards. NY didnt react quite as positively as the holiday hangover weighed on volume on both sides of the pond, with March closing up three quarters of a cent. This morning, global equities opened higher as the earnings season continued and better than expected results were posted. In light of this, we see the possibility of further EUR strength and USD weakness. However, following yesterdays underperformance in the 'C', fireworks are unlikely. The 135 level is becoming more and more important as supply caps any notable gains and keeps sentiment relatively bearish. With lack of decent volume, we retain our neutral stance; the majority of volume is likely to be made up of rolling down the board as first notice day approaches on Thursday. Levels to watch out for on the upside are 135 and 137.5. Resistance lies at 130, 128.50 and 123.

Liffe- Sell (1)- Ldn couldnt capitalise on gains made accross the commodity spectrum yesterday with March settling at unchanged. Spread activity dominated proceedings as Mar/May firmed even more to around the -30 level. This could well continue looking forward and some traders are looking for gains around the -25 level with rumours of a large fund long looking to roll around 4000 lots in the next week or so. In the outrights, 1280 remains a relatively key level in March and should provide the basis for another leg lower should the contract settle below. 1250 would be the next level of support if the 1280 level was to go. On the upside, with supply mounting, resistance lies at 1310 and 1350.

Daily Coffee Market Outlook

2010-02-16T01:48:00.000-08:00

NY- Neutral- Following yesterdays market holiday, NY finds itself firmly in the middle of what looks to be sideways consolidation. For now, the upper boundary appears at 135, while the support lies at 128.50. With the market almost completely driven by the USD at present, we choose to remain neutral pending tomorrow evenings FOMC meeting minutes. This should provide us with some sort of dollar direction as market participants get to grips with the future Fed rate outlook. Were the consolidation zone to be breached to the upside, 137 is your next supply point. To the downside, below 128.5, 123 is the next important support level.

Liffe- Sell (2)- LDN suffered a further slide yesterday on light volume amid the US holiday. The switch provided the main turnover as players continue rolling into May as first notice day in March approaches. Tet in Vietnam is now in full swing, and despite the US back to business, volumes should remain light. Although it is unwise to draw conclusions on days such as yesterday, the downside pace is certainly accelerating, and a close in March below 1280 should increase the pace as such; 1250 then becomes the next target. To the upside, March would need a clear break of 1350 to turn the current direction on its head, but in the current climate, this looks unlikely.

Daily Coffee Market Outlook

2010-02-12T01:56:00.000-08:00

NY- Sell (1)- Yesterdays meeting of EU leaders regarding Greek fiscal woes lifted the market initially in the hope that a solution would be thrashed out. However, as is often the case with these things, the accord that was reached disappointed (buy the rumour, sell the fact), and the Euro subsequently faltered. Statements by European leaders left open how the EU will respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut budget deficits. Despite the dollar gaining strength into the afternoon, the 'C' regained its composure closing a little under unchanged. As the market drifts sideways (halting the recent slide), one must wonder which direction it will take next. In all likelihood, with NY closed on Monday for Presidents day, we see the prospect of some profit taking (albeit cutting losses on the recent highs) and a resulting slide. It is unlikely many traders will want to be left holding long positions over the extended weekend. The switch should dominate proceedings once more, and this is where the action will be, as specs jump on board the firming spread. Resistance can be found today at 135; to the downside, your supports are 130, 128 and 123.

Liffe- Sell (1)- Unlike NY, LDN managed to finish slightly higher yesterday but the move on the back of positive global macro sentiment lacked any real volume and conviction. The range in March remained tight, and held steadily between first resistance at 1315 and support at 1290. Although, with a stronger dollar and question marks over the Greek bailout plan, selling today is unlikely to be spectacular and mostly driven by the switch. We see LDN lower overall, and with this in mind, look for a convincing close below 1290 in order to resume the downward momentum. To the upside as mentioned before, 1315 followed by 1350 are your supply points- the former gaining in importance as the market consitently fails to make a solid break above.

Daily Coffee Market Outlook

2010-02-11T01:52:00.000-08:00

NY- Buy (1)- Volumes were well below average yesterday. Mar/May were predominantly driven by the switch as we edge closer to first notice day; and it was the switch on light volume that pushed the market up to close nearly two cents in positive territory. Overnight, the global macro picture improved as Australian unemployment fell, European leaders meet to thrash out an aid package for Greece and Chinese inflation unexpectedly slowed. Latterly, the Chinese number is good news, as it suggests that inflation in China is not getting out of hand. As such, we shouldn't see aggressive tightening in credit conditions in China, allowing the global recovery to continue. What this all should translate to in the short term is some further relief accross commodities as a whole, global equities and a weaker dollar. As such, we see potential for further gains in NY today, dependent of course on a weaker USD and no negative macro surprises emerging from the woodwork. Resistance remains stubborn in the front month at the 132.50 zone, followed by 135.50. To the downside, support remains firm at 128, while 123 is the next level some way down.

Liffe- Neutral/Buy (1)- We were surprised somewhat by Ldn yesterday, which greatly underperformed NY's positive clawback. Most likely, this can be attributed to very low volume, the majority of which was made up of AA's and the switch. Specs appeared to be noticeably absent from proceedings, thus rendering global macro developments relatively impotent. As a consequence, we choose to remain neutral today despite positive developments appearing overnight. However, that being said, the risk today is most likely to the upside, but this is dependent upon volume and general interest. Resistance lies at 1315 followed by the stability point at 1350. To the downside, 1290 followed by 1250 are your support levels.

Daily Coffee Market Outlook

2010-02-10T02:16:00.000-08:00

NY- Neutral- The commodity markets' main driver, the USD eased yesterday, and as a consequence, should have offered a little restbite from the prevailing downtrend. However, rather unexpectedly, NY struggled to capitalise, and any move into positive territory lacked real conviction and noticeable volume. This morning, stocks rallied worldwide as the prospect of German aid for Greece reassured investors that perhaps there is indeed light at the end of the tunnel; the German finance minister hinted that aid may extend beyond guaranteeing loans, positive in that it is the first real indication that Greece will not be left to fend for itself amid the crisis. Had this comment come over the weekend, we would certainly see it as bullish for the 'C'. However, following yesterdays lack of followthrough to the upside on the weaker dollar, we choose a neutral stance in NY today. To the upside, resistance remains at 132.5 and 135. Support for today lies at 128 and 123. 130 is likely to play its part as options expire today (Wednesday).

Liffe- Buy (1)- London closed more positively than NY following yesterdays USD retreat but its performance was noting extraordinary as volumes remained light. Most likely, the majority of volume came from spec flow as roasters and origin kept to the sidelines. With Tet approaching in Vietnam and the futures price at such low levels, we see this trend continuing for origin players in the short term. Following the German finance Ministers' commitment to aid Greece in a 'bailout' of some form, and yesterdays outperformance of NY, we see the prospect of further gains (albeit small ones) in Ldn. Dependent on the USD, gains could extend to first resistance in March of 1315, followed by 1330. On the downside, support remains at 1250 with 1300 the key trigger.

Daily Coffee Market Outlook

2010-02-09T02:40:00.000-08:00

NY- Sell (1)- Yesterday saw somewhat of a relief rally in NY and commodities in general as a weakened dollar lifted the board following mutterings about the EU periphery; and plans to halt a slide into further ratings downgrades. This seemed to encourage traders who collectively breathed a sigh of relief following the recent downtrend. Most likely, specs looking for a correction joined the party helping to lift the board yet further as the greenback slid. In terms of the 'C', the trend is still pointing downwards and technically speaking, March needs a strong correction above 138 if it is to set Northwards in earnest once more. We see the possibility of yesterday being 'a dead cat bounce' and remain bearish, albeit less confidently. The dollar is driving the market still and as such any further coffee weakness will be explained in terms of dollar strength. To the upside, March should remain capped below 132.5 and 135. Support lies at 128 and 123.

Liffe- Sell (2)- LDN weakness was the theme for Monday morning as robusta did not react positively to dollar weakness on the opening. The trend is firmly downwards on Liffe and this would go some way to explaining the fact that March scraped back to barely unchanged in the afternoon despite a promising performance accross the pond in the 'C'. Traders appear to be un-swayed by greenback 'noise' and clearly see further losses in the short-term. With this in mind, we remain bearish, but, like in NY, the dollar will have its' say. Support lies at 1250, the bears next target. To the upside, 1315 and 1330 should slow down any potential advance.

Daily Coffee Market Outlook

2010-02-08T01:59:00.000-08:00

NY- Sell (3)- With the market being driven from macro trends rather than coffee fundamentals, Friday saw losses once more as a result of greenback strength. The commodity complex as a whole is suffering from this recent upside trend in the dollar and for the time being, this looks likely to continue. Jobs data was mixed and cancelled each other out; non-farm weakness came in combination with an improvement in the US unemployment rate. EU periphery woes continues to be reported in the press in the weekend and this is likely to be at the forefront of traders minds today. In terms of Euro weakness then and potential dollar strength, we see the prospect of further losses in the 'C'. To the downside, support lies at 128, 126.5 and then 123. To the upside, 130 followed by 132 should provide an upside cap.

Liffe- Sell (3)- Losses continued Friday as specs probed for stops below 1300. The dollar momentum appears firmly set and, as in NY, we see Liffe under pressure once again. March closed on 1295, important support, and in the absence of any positive fundamentals, the contract is unlikely to breach 1295/1300 today. To the downside, 1250 is the next talked about support level.

Daily Coffee Market Outlook

2010-02-04T02:00:00.000-08:00

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.

Daily Coffee Market Outlook

2010-01-27T01:50:00.000-08:00

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

2010-01-26T01:49:00.000-08:00

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

2010-01-25T02:50:00.000-08:00

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

2010-01-22T02:22:00.000-08:00

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

2010-01-20T02:12:00.000-08:00

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

2010-01-19T02:02:00.001-08:00

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

2010-01-18T02:33:00.000-08:00

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

2010-01-15T02:14:00.000-08:00

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

2010-01-14T01:41:00.000-08:00

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

2010-01-13T01:55:00.000-08:00

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

2010-01-12T02:19:00.000-08:00

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

2010-01-11T01:38:00.000-08:00

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

2010-01-08T02:09:00.000-08:00

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

2010-01-07T02:09:00.000-08:00

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

2010-01-06T02:31:00.001-08:00

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.

Daily Coffee Market Outlook

2009-12-24T02:25:00.001-08:00

NY- Sell (1)- Yesterday saw miniscule volume accross the board as traders effectively shut-up shop. Weak housing data in the US attracted some interest as small specs covered shorts amid the weaker dollar but the market was caught in a very tight range. Going into year end, we see the prospect for continued weakness as March holds below 144.00 once more, and this could just provide the trigger for some of the highly exposed funds to dump some of their longs and re-balance the books somewhat while waiting for fresh developments going into 2010. Resistance lies at 144, followed by 146.5 and 150. To the downside, we see support at 140-138, followed by 135 and crucially 133.

Liffe- Sell (1)- Ldn managed respectable volume yesterday as the recent market lows keeps traders interested. March failed once again to close above 1340, the key stability zone and as such we see the possibility of further weakness going into year-end. Todays flows are likely to be made up of book-rebalancing and position squaring but following the good volumes we have seen on Liffe over the last week, don't rule out a flurry of action to move the mkt before todays close. Key levels to watch then are the 1340 resistance level, followed by 1425 much further off in the distance. To the downside, 1300 should provide some semblance of support, but other than that, there is very little notable technical levels of note.

Daily Coffee Market Outlook

2009-12-23T01:03:00.000-08:00

NY- Sell (1)- NY is beginning to look weak as Liffe drags it down on the back of a weak dollar and fundamentals. Stops were triggered yesterday through 144 in March and followed continued towards support at 140 before buyers stepped in to halt the rout. According to market commentators, the bulk of the stops came from funds, which currently hold a large gross long position. The dollar then will be key today and further weakness could pose a threat to the 138-140 support zone. Should that be breached, next support lies at 135 before the key level at 133. To the upside, supply mounts, and 144 becomes resistance followed by 146.5. We choose to side with momentum today and believe risk lies to the downside.

Liffe- Sell (2)- There was impressive volume in LDN yesterday despite many traders being out of the market. The weak dollar and breach of key support at 1340 in March led to a swathe of fund selling and speculative sell-stops. March managed to salvage some composure as the contract recovered from the low of 1309 to settle at 1328, but the risk remains firmly Southwards. Should we get another close below 1340 today, this will surely set the tone going into year end and we may see plenty more long liquidation, knocking the contract down yet further. The BOE minutes released this morning may provide some rest-bite as the concensus to maintain rates and quant easing went to 9-0, but with lack of spec interest, the impact is likely to be limited. We remain sellers and look for another close below 1340.

Daily Coffee Market Outlook

2009-12-22T01:15:00.000-08:00

NY- Neutral- Momentum appears to have disappeared from the market as we approach year end, with the major players and short-term specs looking decidedly absent from the market. Looking at the Arabica market fundamentals, Fortis's Agricommodities monthly report points towards a 10mio bag surplus in 2009/2010. However, amid the backdrop of heavy rainfall in Brazil creating uncertainty and erratic flowering, this surplus has not weighed on the market yet. Alas, expectations amongst all the major banks is for prices to reach 170 in their 2010 forecasts, and so it will be interesting to see how the situation develops in the long term. At present, the market is following macro-economic developments extremely closely, and any equity market rally/drop is shadowed closely by ICE 'C'. The dollar has also played its part, albeit, in the last week or so, its' dramatic resurgence has had a relatively small impact on ICE as short term specs shut-up shop for the holidays. Today, we see little chance of fireworks, and look for only small moves in either direction if they do indeed develop. Support comes in now at 144 (weak) then 140. Commentators suggest that March will need a sustained bout of settlement below 144-140 to encourage longs to exit. To the upside, resistance lies at 148.

Liffe- Sell (1)- Ldn has come under pressure the last week or so as it follows developments with the greenback. Drier weather in Vietnam has added weight to this downward momentum and March hangs tentatively above key support at 1340. Despite declining volume and trader participation, this downward trend looks set to continue, and any settlement below 1340 could induce a further wave of selling as longs look to liquidate going into year end. Amid this backdrop, barring any steep declines in the dollar over the next couple of sessions, we must turn our outlook Southwards and look for further losses. Support then lies at 1340; below here there is very little in the way of technical support to halt the decline. To the upside, March needs a strong close or challenge of 1425 resistance to unsurp the bears that begin to smell blood.

Daily Coffee Market Outlook

2009-12-21T02:08:00.000-08:00

NY- Neutral- Despite fundamental data released on Saturday indicating that 2009/2010 crop estimates will be revised down, the market looks set to follow the dollar and any macro-economic data released in the US. Sock market indices and consumer confidence have been driving the market for the last few months and this phenomenon looks set to continue. Overnight, Asian equity indices all posted gains, and early European trading has continued this positive theme. Bearing in mind that daily sentiment can change in a heartbeat, we choose to remain neutral today as the festive season reduces market interest further, and noting that dollar moves in either direction will take ICE 'c' with it. Support in March lies at 140 while resistance remains at 148.

Liffe- Neutral- March encountered further losses on Friday as the dollar resurgence continued. This has brought the key 1340 support level into play and opens the possibility for a challenge to the 2009 lows if enough market interest can be mustered to sniff out stops to the downside. Sharp moves characterised the LIFFE market over the summer as soon as short term specs 'smelled blood' and the potential to profit from high or low-ticking. We remain sceptical that traders will be around in large enough numbers to move this festive market but the possibility is always there. We choose to remain neutral today and look to the dollar and stock markets for inspiration. Support lies at 1340 while resistance can be found first at 1390 and then at 1425.

Daily Coffee Market Outlook

2009-12-18T01:14:00.000-08:00

NY- Neutral- Dollar strength has been the theme this week as the greenback gains against all the majors. Interestingly, this has come despite the FOMC pledging to keep rates low for an extended period (the market believing the contrary after unemployment data) and was the whole basis for the rally in the first place. This ties nicely with views expressed last week; in this market, the trend is your friend- traders first bought dollars as a yield play, they then hoarded dollars as a risk play, despite more positive than negative data appearing this week. Amid such a backdrop, ICE 'C' has held on to its gains remarkably well. However, if the dollar continues to strengthen into year end as Investment Houses balance their books (which we expect), then a steeper fall in NY could be yet to come. We choose to remain neutral today for lack of volume and real interest in this festive market. However, the greenback should be monitored for clues as to the markets next direction on an intra-day basis. Support remains at 138-140 while resistance can be found once more at 148 in March.

Liffe- Neutral- Severe lack of interest accross the board sums the weeks trading up nicely. However, March still came off $20 dollars yesterday on the back of the strong dollar as traders liquidated longs and stepped to the sidelines going into year end. As the greenback rebalances, the risks for Mar LIFFE appear to the downside; 1380 could provide the trigger were it to be breached, bringing key support at $1340 into play. With so many stops expected below here, amid thin trading, the downside reaction could be severe. We choose to remain neutral today, but with eyes to the South. Support remains at 1380 and crucially at 1340. To the upside, supply can be found at 1425.

Daily Coffee Market Outlook

2009-12-17T01:11:00.000-08:00

NY- Sell (1)- Yesterdays session focussed on the FED rate decision and accompanying statement at 19.15 GMT. The grennback remained on the back foot throughout the day but flow was light accross ICE 'C' and and the market struggled to build on Tuesdays gains. As expected, rates were kept unchanged and the FED rate setting committee indicated that rates would remain at historically low levels for the next year or so. Most notable perhaps was Bernanke's statement regarding emergency funding and the plan to withdraw it as planned in Feb due to improvements in the economy. Overnight, the landscape changed once more as Greece was downgraded prompting traders to pile into the dollar/yen once more as a risk play. It seems then, as Spain and the UK emerge in the distance as possible victims to a downgrade, that the greenback rally is not over yet. All this should keep ICE 'C' capped for the time being. As such, we are sellers today and look for challenges of weak support at the 146 area.

Liffe- Sell (1)- LDN has relly failed to join the party in the last week or so as the market slows for the festive season. Unlike NY, gains have been modest and flows extremely light. Even the FOMC meeting failed to set the world on fire. Despite this, with the dollar on a tear, we see the potential for a slide in LDN but expect flows to be light. March will be capped by resistance (still) at 1425. To the downside, support lies at 1392 and 1340 (critical).

Daily Coffee Market Outlook

2009-12-16T01:58:00.000-08:00

NY- Buy (1)- Ice 'C' managed a strong rally accross the board yesterday breaking through key resistance at 146.5 and 148 in March to settle at 148.20. This came despite losses on all of the major equity indices and a resurgent dollar. We expect much of the same today pending the interest rate announcement tonight from the FED. Bernanke and his cronies look likely to say growth is accelerating while repeating the pledge to keep the target rate for overnight bank loans near zero for an 'extended period'. In terms of coffee and all growth sensitive assets, another year of low rates should underscore the market and maintain prices on an upward trajectory. As such, we remain buyers of NY; we begin to enter somewhat uncharted territory resistane wise now so expect supply to come in around 152. To the downside, support can be found at 146.5 and 140.

Liffe- Buy (1)- March was capped by resistance yesterday at 1425, the December high posted on two separate occasions this month. However, bulls were unable to hold on to these gains and the market swiftly retreated to around the 1400 level. We see potential for further gains today, albeit in slightly less dramatic fashion; stops appeared to have been cleared in NY which dragged LDN with it, and volume will indeed be light as we move closer to Christmas. Resistance then stays at 1425 with little else above here before 1515. To the downside, support can be found at 1392 (weak) and 1340 (critical). With momentum now firmly to the upside, not even a dramatic dollar correction is likely to send March down to its' 09 lows before year end.

Daily Coffee Market Outlook

2009-12-15T02:32:00.000-08:00

NY- Neutral- Commodities rallied accross the board yesterday as the market breathed a cumulative sigh of relief over the Abu Dhabi Dubai World debt refinancing agreement. ICE 'C' March managed to rally 3.25 cents as equities climbed and the recent dollar rally was halted. However, March was capped at 146.60, the first resistance hurdle, and settled at 145.90. With this in mind, March sits uneasily, and there is potential for some sort of pullback as the market takes stock. Today sees the release of US PPI and Industrial Production data, both of which can shed more light on the state of the economy since the improved job-market figures at the beginning of December. With the dollar reverting to 'pre-crisis mode', following yield developments as opposed to getting sold on better economic data, trading the data is tricky. No-one can quite be sure of how the market will view the dollar if the numbers are indeed better; as the relationship breaks down then, better data may indeed result in dollar appreciation and commodities getting SOLD. As such, we choose to stand on the sidelines today and watch developments unfold. Resistance remains at 146.5, followed by 148.5. To the downside, support can be found way down at 140-138, 135 and crucially, 133.

LDN- Neutral- Volume was very low on LIFFE Robusta yesterday as the market winds down for the festive season. The resulting range was tight in March with the majority of flow arising from the Jan/Mar switch. Although the market benefitted from early dollar weakness on the Dubai World story, lack of volume (and trader interest) meant that there was no real momentum behind the move and March was only able to post an $8 gain on settlement. Despite some juicy macro data from the States, we expect much of the same today and thus choose to remain neutral. Weak support in March now lies at 1392 followed by 1355 and crucially 1340. To the upside, resistance can be found at 1425.

Daily Coffee Market Outlook

2009-12-14T02:54:00.000-08:00

NY- Buy (1)- Abu Dhabi provided $10 million to help Dubai World, the state owned holding company, meet its obligations last night. Dubai shares surged the most in 14 months on the news and Asian and US futures rebounded on optimism that the Emirates' debt problems wont spread to other emerging markets. The Greenback gave back some of last weeks gains overnight as traders repositioned themselves for the ensuing 'risk rally'. As such, we retain our bullish stance today and look for modest gains accross ICE 'C'. With no specific coffee news released over the weekend and no macro data (of note) due for release today, the festive markets and associated light trading are likely to shift into first gear. The dollar will dictate todays flow and should be watched for any hint of re-balancing as we near year end. Support in NY remains around the 138/140 zone, followed by 135 and crucially 133. To the upside, resistance can be found at 146.5 and 148.

Liffe- Buy (1)- Focus begins to shift towards the March contract now as we approach year end and January nears first notice day. Flow has been light across the board the last few sessions and volumes should fall yet further as the Festive seasons kicks in. The majority of trades will focus on the Jan/Mar, Mar/May switches as traders look to rebalance books and shift positions down the board. With little in the way of macro data, coupled with Christmas markets, the dollar looks to lead the way. In Jan, 1360 remains the demand zone and should provide support above 1295. To the upside, 1400/10 should keep the market capped for now.

Daily Coffee Market Outlook

2009-12-11T02:47:00.001-08:00

NY- Buy (1)- NY managed to post a small gain of just over 1 cent amid very light volume and lack of any juicy fundamental data. Most of Wednesdays losses were erased as March headed back towards the stability zone of 146. Although some of the momentum has reduced, it appears as if the risk lies to the upside as market chatter revolves around the establisment of new longs coming to the fray. For the meantime then, with the dollar losing some of its initiative built from Fridays unemployment data, the market looks like it wants to go up and test December highs once more. We see the potential for a close above 146 today which opens the door to further gains towards 148.5 and 151. Only a dunk below 140/138 will shake out longs and open the possibility of a retest at 133 support.

Liffe- Buy (1)- Like NY, Ldn suffered from lack of volume with what appears to be the festive doldrums slowly taking hold. Jan managed to hold above 1360, further cementing its base above this level. With the dollar on the back foot, its next target will be to break the 1400-1410 barrier, but with light volume and lack of general interest, this may prove to be a bridge too far in the short term. Support then lies at 1360 and 1295 (crucial). To the upside, 1400-1410 followed by 1435 are your resistance levels.

Daily Coffee Market Outlook

2009-12-10T02:21:00.001-08:00

NY- Buy (1)- Strength turned to weakness yesterday as March basis ranged between selling towards 147 and buying as it neared 140. As always, the dollar played its part but the session was characterised by the drift in prices and lacked any real momentum. Despite losses, March retains its upside bias and only a break below 138 should scupper that. Interestingly, there was an important comment by Martin Feldstein, a prominent analyst in todays FT. The dollar pessimist sees the shift away from the currency as simply a diversification in investment portfolios. Whoever follows this line of thinking should also understand that when the diversification is complete, the dolar will stop falling. Something to look out for in the medium to long term, with the greenback being so influencial with regards to ICE 'C'. As noted, todays support lies at 138, 135 and crucially, 133. To the upside, 146.5 remains a key supply point, followed by 148 and 151.

Liffe- Buy (1)- Having broken the upper boundary of the 1295-1370 consolidation zone at the beginning of the week, Jan failed to set the world on fire as flows remained reasonably light and expected fireworks to the upside didn't materialise. Instead, it looks like it is building somewhat of a base above 1360, poised for an attack of the key 1400-1410 area. It appears that this has been driven primarily by a combination of the greenback and spec longs in anticipation of the Vietnam new crop; with this in mind then, new crop estimates must be watched closely along with the continuing strength of the dollar. Disappointment of the former and continuation of the latter in combination could see the market dunk back towards the low 1300's as specs liquidate their longs. We see weak support at 1360 and key support at 1295; resistance resides at 1400-1410 then 1435.

Daily Coffee Market Outlook

2009-12-08T03:44:00.001-08:00

NY- Buy (1)- Despite early losses as a result of Dollar strength yesterday, March was able to make a solid fightback as the Greenback went into reverse. Prompting the dollar decline was FED Chairman Bernanke who spoiled any hopes of an early tightening cycle by saying the US economy still faces 'formidable headwinds'. Traders gathered that he wasn't so entirely satisfied with the reduction in unemployment shown on Friday; indeed, 10% joblessness only looks good after having been at 10.2%, but if the figure remains here for any length of time the economy will still suffer the effects of human capital depreciation. As such, Bernanke re-stated his pledge to keep rates 'on-hold' for an extended period, which we presume to mean until he sees a sufficient decline in the unemployment rate.
With the Dollar resuming its downward trajectory, we see the potential for further gains in March and, having closed above 146.50, see the potential to challenge 148.50 resistance. To the downside, somewhat further down, nearest support resides at 141 and 138. In embarking on this bullish outlook, we note that following the strog 5 cent rally yesterday, there may be some early profit taking and consolidation.

Liffe- Buy (1)- Like NY, initial weakness in Ldn reversed to strength in tandem with the greenback as Jan closed on its highs at 1377. However, expected stops above 1370 did not materialise and the market was not able to stage a further rally towards 1400. Today, with the dollar on the back-foot, we see the potential of gains to 1400; however, throwing caution to the wind and without resistance at 1370 not decisively broken yesterday, we acknowledge the chance of Jan slipping into the boudaries of the previous months consolidation zone (again). A fresh assault at resistance lying at 1405-10 would give the market hope that the sideways range has been well and truly put behind us.

Daily Coffee Market Outlook

2009-12-07T02:41:00.000-08:00

NY- Sell (1)- Fridays unemployment data drew a surprise to the upside with the dollar making (an uncharacteristic) fightback. Better data has correlated negatively with the dollar of late but this was turned onto its head Friday as a wave of short covering lifted values accross the board. Most likely, this can be explained in terms of a yield play; unemployment is a decisive factor in FED rate-setting policy, and Treasury traders sold as the market began to price in earlier than expected rate rises. As a result, ICE 'C' fell as the dollar rose and losses at settlement amounted to 3.30 cents in March. Today we see the possibilty of further losses albeit small ones as overnight dollar selling from the far east looks to influence once more. Crucially however in the medium term, as long as March can continue to hold above 138, we see potential to clear the 146.5 hurdle- but this will be highly dependent on dollar movements in the coming weeks. Support then lies at 138, 135.5 and crucially at 133. Resistance remains at 146.5, 148 and 151.

Liffe- Sell (1)- Like NY, LDN suffered from the dollar rally on Friday and dipped to wards the lower part of its congestion zone. The crucial 1295 support remainded intact however which prevented the 'prophesised' long covering and stop triggering down to the low 1200's. With the dollar looking weak in Asian trading overnight, we remain firmly fixed on that 1295 support level but more in hope rather than expectation as sideways consolidation looks set to continue through the holiday season and into early next year. As has been the case for some time now, resistance lies at 1370, support at 1295. We await further developments with baited breath.

Daily Coffee Market Outlook

2009-12-04T03:05:00.000-08:00

NY- Neutral- Volume was light accross ICE 'C' yesterday as traders tried to glean any indication for the future state of the economy in Europe and globally as a whole during the ECB press conference. Trichet remained characteristically coy deflecting questions regarding present Euro strength and prospects for the dollar going into 2010, and very little action in the currency markets was a result. Today sees' further macro data as US unemployment figures are released for November. Opinion remains mixed amongst analysts as yesterdays calls for seasonal improvements met with bearish ponderings today in the press. With such uncertainty surrounding the outcome, and with the likelihood of traders sitting on the fence as they try to unravel the implications of the numbers, we too choose to remain neutral today. Support is noted at 138, followed by 135 and crucially, 133. To the upside, resistance is found at 146.5, 148 and 151.

Liffe- Neutral- Despite movements yesterday being driven by the Jan/Mar switch, LDN continues to operate within the tight range that the market has now become accustomed to. We expect volumes to remain light as with NY today as traders eagerly await US unemployment data. In such 'stale' circumstances, we refrain from startegy. Support remains at 1295 while resistance lies at 1370. With a bit of luck, Non-farm payroll data may surprise either way today and encourage traders to drive Jan either up or down; but i wouldn't wait with baited breath.

Daily Coffee Market Outlook

2009-12-03T02:32:00.000-08:00

NY- Buy (1)- Having broken free of the 130's consolidation zone March NY has attracted a swathe of new longs as traders look for further gains in the contract. The fears arising from the Dubai World debt 'crisis' seem to have been put on the back burner as analysts look ahead to US Non-Farm Payrolls on Friday and equity markets resume their surge upwards. Some notable institutions are calling for a resounding improvemet in jobs lost in November as analysts look towards 'actual' rather than 'hopeful' economic growth. Looking to the present however, the ECB rate announcement and more crucially the following press conference may well offer a glimpse into a European stimulus 'exit strategy'; any hints that rates may begin to rise sooner rather than later could dampen any possible improvements in sentiment from the employment number tomorrow. We remain bullish NY and continue to eye gains to 146 then 148.50. Support lies at 138 and crucially, 133.

Liffe- Neutral- Without wanting to sound like a broken record Ldn continues its consolidation sideways and offers very little in the way of ideas to gauge its short to medium term intentions. As such we choose to retain our neutral stance and look to the ECB press conference and resulting dollar/equity market movements to give direction. Support remains at 1295 while rsistance looks to cap Jan at 1370.

Daily Coffee Market Outlook

2009-12-02T03:49:00.000-08:00

NY- Buy (1)- NY yesterday continued the theme set on Monday as it closed up just under a cent. Having decisively broken free of the 133-141 consolidation zone, March is poised for further assaults on the 146 and 148.5 resistance zones. As such, we remain bullish in NY, noting support at 138. One must bear in mind however that Thursday entertains the ECB rate announcement and Friday Non-Farm Payrolls- a surprise on either occassion will have ramifications for the dollar and commodities as a whole.

Liffe- Neutral- Ldn was unable to follow the good work of the ICE 'c' contract and failed to mount any meaningful attack of the upper consolidation border at 1370; and this is despite the challenge and bounce from support at 1295. With such developments, we cannot be certain of Ldn's next move, and in essence, expect further consolidation between the seemingly never-ending 1295-1370 zone.

Daily Coffee Market Outlook

2009-12-01T03:24:00.000-08:00

NY- Buy (2)- The fallout of last weeks Dubai World debt debacle appears to have been short-lived as markets recovered accross the globe and the dollar continued to decline. Interestingly, equity/commodity market recovery came on the back of 'assurances' from Abu Dhabi. However, on paper, these assurances look rather shaky and the desert state has not in fact guaranteed to back Dubai to the hilt (although analysts believe that it is unlikely to let Dubai 'go-under'). Alas, the Dubai government has also stated that it will not guarantee Dubai Worlds' debts either, leaving global investors in a puzzling situation. One might question what other skeletons lie in the closet of other nations if the once 'investment darling' can suffer such a setback. And how much money is left to bail them all out? The equity and commodity rally continues regardless. And so, we find ourselves in perhaps the same situation as we did 10-12 months ago, albeit the opposite way round- with the bulls in control and sentiment at a high, the effects of bad news are short lived and the recovery vigorous.
Despite our gloomy long term ponderings, we remain bullish NY for now- March has regained its' composure and blasted through resistance at 141. The next resistance target lies at 146.5; a close through here opens the way for attack of 148 first then more notably 151. To the downside, support is now at 138.5 and critically, at 133.

Liffe- Neutral- Following the Dubai issue, LDN managed to recover from its challenge of the 1295 support (briefly touching 1300) and rally back towards the middle of the current range in the 1340/50 area. Technically speaking, the rejection of the low hints at a challenge of the range top at 1370, but judging by recent (ranging) performance, this is unlikely. We refrain from strategy today, but were Jan to break throught the ceiling at 1370, this would set up an assault of 1410 and more crucially 1435. To the downside, strong support remains at 1295.

Daily Coffee Market Outlook

2009-11-27T02:17:00.000-08:00

NY- Sell (3)- Following the US Thanksgiving holiday thursday, world markets were sent into a tailspin overnight as Dubai World, the ambitious property development asked creditors for an extension to debt repayments due on Dec 14th. The unexpected step has left analysts questioning debt across the region and could call into question hopes that the worst of the crisis is firmly behind us. In light of this, we are strongly bearish for the ICE 'c' market today and expect a sharp pullback across all commodity indices. 133 is the key support level to keep an eye on in March- a break through here could see the contract tumble all the way into the 120's.

Liffe- Sell (3)- In line with ICE 'c' and the commodity complex as a whole, we see the potential for steep losses in LDN today as investors reduce their exposure to so called 'risky assets'. In Jan, we look for a test of the lower border of the current range at 1295- a break through here opens the way for further losses all the way to 1220 then 1170.

Daily Coffee Market Outlook

2009-11-26T02:16:00.000-08:00

NY- CLOSED FOR THANKSGIVING.

Liffe- Neutral- With the US closed today for thanksgiving, volumes in Ldn are likely to be very light. In light of this, we choose to remain neutral and see little chance of any meaningful developments. In Jan, resistance at the top of the range is at 1370; support can be found at 1295.

Daily Coffee Market Outlook

2009-11-25T02:12:00.000-08:00

NY- Buy (1)- The last few sessions have seen ICE 'c' range somewhat, closing up or down on the whimsicle nature of the commodity complex as a whole as investors try to gauge the appetite of further gains across the so called 'risky assets'. To call commodities 'risky' is somewhat of a misnomer but alas they have benefitted hugely from the surge in equity indices and the weaker dollar and have cemented themselves as a inflation hedge. With no macro data of note due for release today, we look to equities for guidance and see the potential for small gains above 135.5 and more importantly, 133. To the upside, resistance can be found at 138.5 and then 141.

Liffe- Neutral- Floundering within the boundaries of the current range, LDN has given traders very little to get excited about. With no data to tickle the imagination, we choose to remain neutral noting support at 1295 and resistance at 1370.

Daily Coffee Market Outlook

2009-11-23T03:13:00.000-08:00

NY- Buy (1)- As expected, ICE 'C' fell on Friday amid economic growth fears; Mar closing down 130 points on the day. However, support at 133 was not breached and as such, NY should halt the downward momentum for now and consolidate somewhat. Comments from Charles Evans, President of the Federal Bank of Chicago over the weekend are likely to bolster this support and may even create small upside gains. He told the FT that interest rates may remain near zero until late 2010, perhaps 2011, allowing asset markets and higher risk assets to continue to move higher. With this in mind, we turn our focus to the upside for today; 142 is the next resistance and is some way off, leaving NY scope to move higher reasonably unimpeded. A break of 142 would give scope for a further challenge of 146.5. To the downside, support lies at 133 then 128.

Liffe- Buy (1)- Despite early losses, LDN staged an afternoon recovery and actually finished up $17 in Jan. Following NY, we see scope for further gains today, albeit small ones on the back of weekend comments by Evans in the FT. However, fireworks are not expected and thus we see a continuation of sideways movement between 1295 and 1370. Until we get a break of either level, we refrain from making a more medium term assesment of market direction; however, judging from historic market data, it should be noted that prolonged sideways consolidation has invariably led to a break on the downside.

Daily Coffee Market Outlook

2009-11-20T03:13:00.000-08:00

NY- Sell (2)- NY closed 3 cents down yesterday, declining as expected on the back of a resurgent dollar amid global economic growth fears. Today we see further declines accross the board as investors unload risky assets- ECB President Trichet signalled this morning that the central bank is unlikely to extend liquidity measures further in order to quell inflation concerns that already sent treasury yields negative yesterday. All this is likely to be very bearish for ICE 'C' which has benefitted favourably from the commodity/'risky asset' rally of late. We look for tests of support, firstly at 135.5, then further to 132.50; the latter could see stops triggered to the downside, which, in thin markets puts the 120's firmly into the fray. To the upside, resistance remains at 142 then 147.

Liffe- Sell (2)- We are becoming more negative LDN coffee by the day as dollar strength and equity weakness take hold. The pertinent question now being asked accross the market is 'has the rally come to an end?'. A rally that has seen equities rise nearly 60% since the beginning of the year. There is no doubt that a small correction to the downside looks imminent, but as with all these things, this will be tempered by future macro data releases and the accompanying market sentiment. In the short term then, traders appear to be reshuffling their exposure, getting rid of some of the more 'risky' assets that have benefitted so strongly from the rally. This will all impact LDN, and, with no important data scheduled for release today, we see longs liquidating somewhat going into the weekend. 1295 remains pivotal support to the downside, and it will be interesting to see if it gets tested once more- a break of which could send Jan down towards the 1200 level with little in the way of support to stop it. To the upside, the stability level of 1370 looks a distant prospect for now.

Daily Coffee Market Outlook

2009-11-19T03:40:00.000-08:00

NY- Sell (1)- Yesterday saw a 'predictable' rally accross the board as dollar weakness and commodity strength gave NY a lift. However, in line with the topsy turvy week so far, we see a reversal today following economic growth concerns. Despite an upward revision in the OECD 2010 growth forecast, fears were aired overnight that the rally in equities/commodities has outpaced prospects for growth. Analysts noted markets have gone up quite aggressively in the last six months and now the time has come for a consolidation. In stock markets around the world, volumes have gone down recently and this may be a sign that a short-term top is very close. As such, we see weakness in Mar today (As first notice day for Dec draws near, so our attention shifts to Mar '10 as the front month), and look for support at 135.7 and crucially, 133. In order to keep momentum alive, we look for a break of resistance at 142. Above here, 147/148 and 152 are your next supply points.

Liffe- Sell (1)- Yesterday saw LDN manage a rally accross the board following NY, the weaker dollar and commodities as a whole. However, key resistance at 1370 wasn't breached, and reflecting concerns that the rally has outpaced the growth outlook, we see weakness today. Intra-day, the gap at 1339-1333 will be key main support in Jan followed by 1295; as noted, 1370 should provide a cap followed by resistance at 1400/1410.

Daily Coffee Market Outlook

2009-11-18T03:58:00.000-08:00

NY- Buy (1)- When they were up they were up, and when they were down they were down; the nursery rhyme springs to mind when trying to describe ICE coffee this month. Fridays test (and culmination of the weeks' losses) of 130 has been followed this week by gains back up towards the high 130's. What has been driving this move? It is hard to say as fundamentals appear to have taken a back seat, but the resurgent commodity complex is likely to have played a starring role along with a weaker dollar amid no Chinese commitment to devalue the Yuan. Today see's the release of US housing starts and the all-important US CPI, both of which are likely to surprise to the upside, thus adding fuel to the risk rally and commodity surge. In a fickle market, we take a bullish stance and look for further gains above 133 and most importantly, the 130 level. Resistance is found at 139.50 then 146.

Liffe- Neutral- Following last weeks sell-off, LDN has been a little more predictable with a small recovery Monday and sideways consolidation since. Like NY, the market is looking to the overall commodity complex/dollar for intra-day direction, and between 1295 and 1370, we expect Jan to continue this sideways move. Medium term, the momentum appears to be to the downside, and the 1295 low is still very much at risk; which, if broken, will open the trapdoors to key support at 1160/70. We choose to remain neutral for now and look for a close above 1370 to give the market a semblance of stability.

Daily Coffee Market Outlook

2009-11-17T03:32:00.000-08:00

NY- Neutral- The markets continue to surprise as ICE 'C' rallied an impressive 5.25 cents yesterday following last weeks retreat. Having held above key support at 130, shorts were squeezed and stops triggered as Dec settled at 136.35. Unsurprisingly, this came as the dollar weakened further against all the majors, sterling in particular. This is not without efforts to the contrary by the US government; Ben Bernanke pledged that the FED will help keep the dollar strong at the London close, even while reiterating that rates will remain low for an extended period. It is rare for the FED to comment on the currency, however, it is difficult to imagine that the FED chief has any other options to ensure dollar strength other than rhetoric, especially with the Chinese failing to give support.
Once more, we remain neutral today amid choppy markets. Support resides at 130, 128 and 125 while resistance lies at 140.5, 146.5 and 148.5.

Liffe- Sell (1)- Yesterdays strength did not come as much of a surprise following last weeks dramatic fall. The hold at the low of 1295 in Jan did give LDN bulls some encouragement but failure to close above 1370 key resistance will have taken the wind out of their sails somewhat. Although difficult to call in the immediate short term, we see LDN as a sell medium term as long as it doesnt break 1370- alas, consolidation below this level should only serve to encourage more shorts into the market for a challenge of that 1295 low once more. Below 1295, thereis nothing to halt a slide all the way to 1219 initially then 1170 is your next key demand point. To the upside, a break of 1370 may serve up a challenge of the 1400/1410 zone.

Daily Coffee Market Outlook

2009-11-16T03:02:00.000-08:00

NY- Neutral- NY managed to hold above the crucial 130 level on Friday, closing at 131.10. However, with momentum firmly to the downside, we see a break of 130 a high probability. Dollar weakness is likely to play a role once more, as the possible revaluation of the Chinese Yuan after a meeting between Obama and the Chinese didnt materialise thus leaving the dollar on the back foot. We choose to remain neutral above 130 for the time being acknowledging the risk of sideways consolidation in the short term. However, a break below 130 could see stops triggered and Dec tuble to 125. To the downside then, support lies at 130, 128 and 125. To the upside, we would need a close above resistance at 136 for NY to regain a semblance of stability.

Liffe- Neutral- As in NY, LDN has experienced a week of heavy losses accross the board. That elusive 1527 level seems miles away as Jan narrowly held the June low of 1295 and in turn put the breaks on a fall into the abyss (for now). Psychologically speaking, this has the potential of encouraging somewhat of a recovery in Jan as bulls note that the 2009 low held nicely; however, the market will need to close above resistance at 1370 to regain stability and take back the initiative to the upside. We choose to remain neutral for now between 1295 and 1370. To the downside, a break below 1295 could trigger a wave of stops with nothing of note to halt the fall before 1219. At the other end of the scale, the distant resistance of 1370 will need to be reclaimed to put 1295 to the back of traders' minds. Medium term, we are bearish, and expect another assault of 1295.

Daily Coffee Market Outlook

2009-11-11T04:00:00.000-08:00

NY- Sell (1)- Yesterday saw Dec come off in spectacular fashion as stops were triggered below the all important support level at 137.50. It appears the recent uptrend has come to an end as the contract teeters on the brink of further losses below 133. We reverse our outlook to the downside now and expect further losses; technically speaking, a decisive break below 133 could see Dec retreating back towards the low 120's and launch another challenge of the base that was so effectively formed back in late August/September. The market will need some help from a weak dollar in order to clamber above 138 and regain a semblance of stability.

Liffe- Sell (2)- Liquidation was the order of the day in London on Tuesday as big losses happened accross the board. Selling originating from specs, funds and origin all converged as initial support at 1400 then further to 1360/80 in Jan was broken triggering further stops and further liquidation. With all key support broken now, the June low of 1295 is brought firmly into the fray and traders will be watching closely to see what happens next. We are bearish for the prospects of London over the coming weeks although today may see some profit taking and consolidation as the US and some of Europe enjoys rememberance day holidays and market participants regroup. A rebound above 1400 is needed if Ldn were to gain some sort of stability.

Daily Coffee Market Outlook

2009-11-09T03:16:00.000-08:00

NY- Buy (1)- Friday proved to be somewhat of a mixed bag in NY as early strength turned into weakness with Dec closing 3.20 cents down on the day. Of note was the US non-farm payrolls and US employement data which surprised to the downside. The psychological level of 10% unemployment was breached (to 10.2% vs estimated 9.9%) and was the driver of the move. Despite this, however, support at 137.50 remained in-tact; coupled with G-20 comments on Saturday regarding stimulus measures and their commitment to continue with them, we remain bullish NY. Fears of a withdrawal of stimulus measures have plagued equity markets of recent weeks and the pledge to continue pumping money into the economy should support risk appetite into year end. As such, 146.50 remains a viable target for Dec. On the downside, look for support at 137.5 and 134.

Liffe- Sell (1)- Ldn continued its consolidation albeit slipped somewhat to close at 1439 in Jan. The market is almost impossible to read with the dollar, equities or even fundamental macro data having no impact whatsoever. Congestion has appeared around 1435 providing what looks to be a semblance of support. Below here, 1407 is your next level followed by 1370. There looks to be little chance of an assault upon the 1480 zone in the near future and as such we see more risk to the downside and look to sell through stops around 1430/35.

Daily Coffee Market Outlook

2009-11-06T03:11:00.000-08:00

NY- Buy (1)- Initial weakness was shortlived yesterday as Dec briefly tested resistance at 140 before rallying, closing up 1.35 cents on the day. All eyes today are on US non-farm payroll data released at 13.30 GMT. Analysts are expecting an improvement on last months reading and only a 0.1% increase in US unemployment to 9.9%. Flow is likely to be switch oriented before the figures and expect volumes to be light. We remain bullish above 140; however, the unemploymenty data will be critical, and a worse than expected reading could send NY tumbling. A break below 140 on weaker data and 133 is your next target, followed by 128. To the upside, expect resistance first at 146.50, then your next resistance lies at 151.

Liffe- Neutral- Once more Ldn consolidated in a sideways pattern yesterday, Jan finishing $2 down on the session. Like NY, traders are waiting for the all-important US unemployment data and this will provide a platform upon which to trade. On better than expected data, London may be able to test its upper consolidation level of 1480 opening up gains to 1500. To the downside, we see support at 1420-1400. Today, once more, we choose to remain neutral pending the coming macro data.

Daily Coffee Market Outlook

2009-11-05T03:53:00.000-08:00

NY- Buy (1)- NY closed relatively unchanged yesterday following a slightly worse than expected ADP employment figure and unchanged FED rate announcement that signalled they would remain on hold for an extended period (at least 6 months according to analysts). Dec continues to build a base above 140, and as long as it keeps closing above here, we remain on target for a possible rally to 146.50 in the short term. Volume remains relatively light and traders will look to jockey for position over the next session and a half in anticipation of Non-farm payrolls tomorrow which will shed more light on the grass-roots state of the economy. Demand remains around 139/40 with next support at 133. Resistance can be found at 146.50 then 151.

Liffe- Neutral- Another relatively quiet day for Ldn yesterday as Jan continued to trade in a tight range around the 1450 level. Traders appear to be waiting on the sidelines as volumes remain light and there is little technical impetus. As such, we continue our neutral stance and look for a break of 1480 to the upside or 1420 on the downside before embarking on a strategy. Tomorrows Non-farm payroll data and resulting equity/dollar movements could provide the kick start that Ldn needs to break from this current consolidation.

Daily Coffee Market Outlook

2009-11-04T04:15:00.000-08:00

NY- Buy (1)- NY managed to break and close through the important 140 resistance level on Monday thereby voiding our bearish stance. Yesterday saw a dip towards 138 but the decline was short-lived and Dec managed a close above 140 once more. Despite dollar volatility and uncertainty resulting from the carry trade 'asset bubble' it appears as if the market is taking these 'setbacks' in its' stride and the appetite for risky assets and commodities remains. As such we target 146.50 and further 151. To the downside, support resides at 138 and uptrend demand of 133. A break of the latter would see Dec NY tumble back to the 120's.

Liffe- Neutral- The market was unable to hold onto Mondays gains yesterday as it tumbled back under previous resistance at 1463. Most likely, the retreat was caused by profit taking from specs as producers kept out of the market for the most part. Technically speaking, the failure to hold above 1463 would signal the possibility of another downside spike; however, on the back of the current uptrend and potential for further NY gains, we prefer to remain neutral for the time being. We see the possibility for consolidation in the short term between support at 1411 and resistance at 1483. Medium term, we need fresh fundamental support from adverse weather/poor harvest indications in vietnam before the market attempts to hit the key upside target of 1528. The direction of the dollar will be critical but fireworks today should be saved until tomorrow (excuse the pun) as the US enjoys a holiday and the market flow remains light.

Daily Coffee Market Outlook

2009-11-02T04:05:00.000-08:00

NY- Sell (1)- Small mid-week gains in Dec were thwarted on Friday as US fundamental data showed that confidence is waning and consumers are putting the brakes on spending; inevitably, the dollar rallied as equities lost ground. Support remains at 133 cents/pound, but we see risks to the downside, so long as the 140 resistance level is not overtaken in the meantime. Notably, revered economist and investor Nouriel Roubini commented in this mornings Finacial Times that 'the mother of all carry trades will burst the biggest asset bubble'- in short, that the weak dollar is financing risky asset purchases. The quandry for central banks then and the US in particular, is whether to intervene in the currency markets to prop up the dollar and or raise FED interest rates. The former would wreak havoc on equity and commodity markets (coffee included); the latter could put the brakes on any recovery that western economies are experiencing (or seen to be experiencing). The coming G20 meeting at St. Andrews could then prove pivotal, and should be watched closely for any currency intervention comments (or lack of).

Liffe- Sell (1)- The market receeded somewhat on Friday in line with NY ICE 'C'. While 1463 resistance in January is still intact, support firstly at 1403 then more critically at 1370/60 remain in focus. We remain bearish and would look to exploit any rallies towards 1463 as a sell opportunity. Conversely, a break and close above here and we look to the elusive 1530 ceiling once more. The dollar should be watched closely today following currency and carry trade chatter over the weekend as it is likely to set the tone for Liffe and ICE 'C' today.

Daily Coffee Market Outlook

2009-10-30T03:20:00.000-07:00

NY- Sell (1)- ICE 'C' rallied yesterday on the back of a better than expected US GDP reading, as traders shed the dollar and ploughed into riskier assets. However, key resistance at 140 remains untouched and Dec requires a close above here to indicate a further assault of the elusive 146.50 supply point. On the back of commerce department figures indicating consumer spending decreased last month, we choose to remain bearish today amid dollar strength and equity weakness. Support remains at 133 to the downside, a break of which may hasten a retreat into the 120's. To the upside, traders still look for a break of supply at 140.

Liffe- Sell (1)- LDN has been very difficult to read of late, with thin trading and stop triggering creating increasingly volatile sessions. Looking at Jan, yesterday turned out to be rather 'subdued' in comparison to recent days with a range of $22 and closing $15 up, flow dictated mainly from the rolling of Nov/Jan positions and dollar strength. Jan has certainly looked stronger since Tuesdays topside stop triggering but we need a solid close above 1463 first, then 1483 before we can meaningfully challenge 1530 once more. Below 1463, we are somewhat bearish today; amid a weaker commodity picture, and with the first support being some way away at 1397 we see 'danger below'. As mentioned, look for a close above 1463 to give some semblance of bullish stability.

Daily Coffee Market Outlook

2009-10-28T03:19:00.000-07:00

NY- Sell (1)- Yesterdays session saw NY trade a relatively tight range and close almost unchanged 0.15 cents down in DEC. Overnight, Asian stocks lost ground with shipping stocks and shipbuilders leading the way on increased uncertainty over the strength of the global economic recovery. Traders look on today as they await housing and manufacturing data in the US and also look to tomorrows US GDP 3rd Quarter figures- if the UK data is indicative of the world economy as a whole, recent gains in equities and decline in the dollar could reverse and take ICE 'C' with it. As such, we expect a reasonably choppy session as specs reposition in anticipation of these numbers; the commodity picture is down as a whole and we look to 133.5 support- a break of which could send Dec tumbling into the 120's. To the upside, a close above 140 will be needed to give encouragement for a rally to that important 146.50 resistance hurdle, but this seems a long way off as things stand.

Liffe- Sell (1)- Despite Ldn's agressive short squeeze amid stop triggering yesterday, the rally was short lived and Nov closed below the important 1400 resistance hurdle. In the face of a stronger dollar, weaker equities and indications that there will be a world robusta surplus in 2009/10 it is looking unlikely that the market will challenge the 1528 key level in the short term. The 1330/40 support is firmly on the radar and we see the chance of a further slide towards here over the next few sessions. Nov needs a definitive break through 1440 to change our outlook, but until then we are sellers with our eyes on US 3rd Quarter GDP tomorrow.

Daily Coffee Market Outlook

2009-10-27T03:46:00.000-07:00

NY- Sell (1)- Following Fridays sell-off, consolidation was not to be unexpected yesterday, especially with nothing in the way of macro data billed to be released. Highs were reached early in tandom with the dow that was up 100 points at one stage before staging an about turn in sympathy with the dows' reversal to minus 100 points. Amid lack of macro data, comments by the government talking of a possible withdrawal/non extension of homebuyer credit set the tone for the day as moves were exaggerated with low liquidity. Volumes remained light and choppy trading was a theme for the session. Like Monday, macro data is somewhat thin on the ground today and we expect thin trading once more; with little else to watch, we look for guidance from the dollar and oil. Resistance remains around 139/140 and we are sellers of rallies up here. To the downside, support remains at 133.50, a break of which may arouse short covering from the increase of longs highlighted by yesterdays COT report.

Liffe- Neutral- Despite early weakness yesterday, Nov LDN rebounded, effectively testing support at 1330 and resistance in the 1380's amid choppy trading. In such quiet markets, the potential today is for further consolidation between 1330/40 and 1380/1400; by the same token, low liquidity may also exaggerate movements so we look for stop triggering through 1330 or 1380. As such, we choose to remain neutral today and wait for a break (and close) of either level before embarking on a strategy. Beyond 1330, next resistance lies at the years low of 1275; to the upside, through 1400 your next supply comes in at 1440.

Daily Coffee Market Outlook

2009-10-26T04:10:00.000-07:00

NY- Sell (2)- Friday trading came as somewhat of a surprise with regards to the scale and agressiveness of the pullback. Dec closed 650 cents down on the day amid stop triggering below 140 in thin trading volumes. We had previously been looking for a further assault on 146.5 but the market had other ideas and with the 139/140 support level now broken one feels that the next direction is likely to be down. Surprisingly, the dollar was on the back foot and stocks were relatively unchanged during the move- whether this indicates the relationship between NY and the dollar/stocks is breaking down remains to be seen and will need to be monitored over the coming week. Nothing of note was said over the weekend by any influential economic bodies and with no macro data set for release today technicals are likely to be the driving force of ICE 'C'. We look for weakness below 138/139 as support becomes resistance and we are sellers on rallies. To the downside, resistance lies firstly at 135.5, then 133.5 followed by 129. We would not be surprised however of some consolidation in the near term and a relatively quiet day today following Fridays shennanigans.

Liffe- Sell (2)- LDN collapsed Friday in line with NY as stops were triggered initially below 1428 and then once more below 1400. Support at 1388 was easily overcome and Nov finally closed at 1363. With key support levels broken we expect further weakness accross the board; in Nov, next support lies in the 1330/1340 zone which we see as being in danger of being tested today. If it were to be breached then there is nothing really to stop the market testing the years' low at 1275 (June 25th)- and this is very much a possibility if NY continues to probe lower. To the upside, 1388 should cut short any recovery.

Daily Coffee Market Outlook

2009-10-23T03:44:00.000-07:00

NY- Neutral- NY consolidated its' position above the 139 threshold yesterday despite showing signs of early weakness; by the afternoon/evening Dec staged a fightback and the contract finished just 65 cents in negative territory. One might speculate that the market has found its level for the time being above 140 then. If only for lack of data/comments in the market we choose to remain neutral for todays session, noting that the market could go any direction within a couple of cents. The dollar looks likely to play a role once more- to this end then, it might be worth taking a look at views of ECB Governor Trichet last night who commented about 'excess currency volatility'; this seems odd considering the VIX is sitting at a year low, so one must conclude that he is talking about the absolute level of the Euro vs. the Dollar. However, appeals to the US to stabilise the dollar have fallen on deaf ears and thus we see further dollar weakness as a clear possibility. Looking to the medium term, we remain bullish above 139 and look for a challenge of 146.50 where a break brings 151 into play.

LDN- Sell (1)- This mornings UK GDP first estimate fell well short of analyst estimates at -0.4% growth, confirming fears that the recovery will be a slow and painful one. However, despite drops in the pound against the major currencies, the FTSE has remained resilient. One might speculate then that the QE programme looks likely to be extended, despite thoughts to the contrary, thus bolstering the stock market. Although unlikely to affect Liffe, it is an interesting footnote; and warning that the world economy is not out of the woods yet. LDN looked weak yesterday, and despite holding above 1428, in the short term, further falls appear likely. As such, we envisage a challenge of 1428 today, where a close below brings the 1300's into focus. 1388 is your next support, followed by 1336. Were a turnaround to occur, 1488 remains the first supply point.

Daily Coffee Market Outlook

2009-10-22T03:27:00.001-07:00

NY- Sell (1)- NY had a strong close yesterday finishing 250 cents up on the day despite early weakness, most likely on the back of a waining dollar. Down days followed by up days seems to be the trend this week as the market consolidates and decides which way to go next. Overnight data releases saw China's economy expand at the fastest pace in a year as stimulus spending and record lending growth helps the nation lead the world out of recession. Rather than bouy Asian equities however, stocks dropped and the dollar rose on concern that the acceleration in China's growth will spur policy makers to consider withdrawing fiscal and monetary stimulus in the coming quarters. Conversely, Beige Book data from the US last night was labelled by some market commentators as disappointing; the problem for them is that market expectations for growth in the US economy are running far ahead of those expected by the central bank. And quite justifiably so- as government support programmes expire, activity seems to evaporate. If the pick up is not self-sustaining rate hikes will be put on hold. The dilemma in China and the US is this: if monetary policy is tightened, there is a high possibilty of a second dip next year; and if we continue loose policy, another asset bubble might not be far away.
We see weakness in NY today on the back of a strong dollar and weaker equities. However, as long as we hold above 138/139, we see potential for the uptrend to continue and still look for our break of 146.5.

Liffe- Neutral/Sell (1)- The ebb and flow of the LDN market has been rather unspectacular of late, providing very little in the way of technical signals to give an idea of its' future direction. Despite interesting developments in the global macro picture, we don't see much changing the current trend in the short term. Record stocks on Liffe are likely to weight the market for the time being; conversely, a weaker dollar and strong performance of the commodity complex of late is likely to give LDN some support. As such we remain neutral and look to NY to give us an idea of todays short term direction. 1428 remains as downside support, followed by 1388. 1488 then 1528 are your resistance levels.

Daily Coffee Market Outlook

2009-10-21T04:01:00.000-07:00

NY- Buy (1)- Yesterdays pullback in NY was not unexpected following Mondays' challenge of the 146.5 resistance hurdle. Many traders will have considered the failure to break that level as a sign of the rally faltering; and taken profit on longs accordingly. Coupled with worse than expected US Housing Start data, a stronger dollar and weaker equities, the only way was down. In spite of this, we remain bullish and see it as only a minor set-back. Above 138/139 we look to the upside; first a challenge and close above 146.50, then the target becomes 151. Following from patterns since the beginning of October, we very much see the trend as your friend.

Liffe- Buy (1)- LDN has been rather hard to judge of late and yesterday was no exception, with Nov retreating $15 on settlement, very much following the lead of NY. Nov is caught in a tight congestion zone between 1488 and 1428 and giving very little in the way of clues as to which level it will break. We remain bullish, but mainly based on the expectation of further gains in NY and further declines in the dollar. Were Nov to dip below support at 1428 a probe into the high 1300's becomes more than likely and we may begin to change our outlook. For the moment, look for another challenge at the upper end of congestion and 1528 in the medium term.

Daily Coffee Market Outlook

2009-10-20T02:55:00.001-07:00

NY- Buy (1.5)- Another strong day on ICE 'C' yesterday with gains of 140 cents. Dec Rallied to a high of 145.40 in early trading, around 1 cent short of our resistance target at 146.50. The focus this week is on Q3 earnings and this gave market players the impetus yesterday with strong results from the likes of Apple, Texas Instruments and the German carmaker Daimler. We see further scope for good results this week as seems to be the trend of late and this should provide NY with some near term support. We remain bullish, but note the possibility of some profit taking in the short term; a close above 146.50 is the goal, and this should open the door to gains of up to 151. To the downside, we see support at 138.50- any dips towards here should be considered a buying opportunity.

Liffe- Buy (1)- LDN has appeared to lack any sort of firm resolve to push on throught the upper limit of the pre 1488 congestion zone in the last few sessions. Yesterday gave a textbook example of what happens when the market has little technical or fundamental impetus to give direction; Nov closed at 1461, just $1 up on the day. We remain bullish on the back of stronger expected earnings and the resulting weak dollar and higher equities; NY strength is also likely to lend support. However, we see little else to provide direction. As such, our bullish outlook is somewhat weak. Look for strength, and a break above the 1488 resistance to perk interest once more; otherwise consolidation between 1488 and support at 1428 is likely.

Daily Coffee Market Outlook

2009-10-19T03:47:00.000-07:00

NY- Buy (3)- ICE 'C' shook off earlier consolidation below 139 on Friday, triggering stops and short covering. Our initial resistance target of 141 was easily breached and the market enjoyed a close of 142.85, 510 cents up on the day. The situation in Brazil appears to be the main driver of Fridays' move, where the 2010/11 crop looks unlikely to return a record output as rains compromise the coming harvest. This, combined with a further reduction in US green coffee stocks sent the contract Northwards. Amid further earnings results this week and a weak dollar, we see the potential for Dec to reach our second resistance target of 146.50; a breach and close above here would set the stage for a challenge of 151.5.

Liffe- Buy (2)- London staged a small rally Friday, bouyed notably by strong gains seen in NY. November closed $17 up on the day and we expect a challenge of 1488 resistance in the next few days. This has proved to be a stumbling block of late, but with oil rising to a year high of $79 per barrel and the dollar suffering once more, this should prove to be a formality. We then look to 1528 and a close higher to signal the sideways consolidation as being well and truly behind us. With no technical impetus and specs noted as being sidelined, we look to fundamentals and US earnings to give us some momentum. Failure to break 1488 and the 1400 level comes into play once more on the downside.

Daily Coffee Market Outlook

2009-10-15T04:03:00.000-07:00

NY- Buy (2)- Yesterdays' reading of the FOMC minutes revealed an unexpected dissonance between the committee members with regards to the QE programme and asset backed security purchases. The disagreement at the FOMC suggests to short-term traders that the Fed is nowhere near any decision to move rates and they threw the dollar overboard. With no chance of currency intervention due to the instability it might trigger and Fed disagreement, what is left to hedge with- gold, oil, or even coffee?! We retain our bullish outlook then, and see dips as a buying opportunity once more. Weakness has appeared to draw spec interest of late and we do not see that pattern changing in the next few sessions. Technically speaking, it appears as if the 138/139 are proving stubborn hurdles; however, with continued dollar weakness this should prove to be a short term problem, and we look towards 141 initially followed by gains to 146.5.

Liffe- Buy (2)- Despite Mondays' aggressive fall to 1388, the market appears to have stabilised somewhat having cleared a number of large stops. Momentum appears to be to the upside once more as fresh specs enter the market at relatively 'cheap' levels. For the bulls to maintain this momentum Nov needs to close and hold above 1440 for the next few sessions- this would prove Mondays retracement as a false break in a technical sense and attract further programme interest. We look for gains to 1480 and then to that sticky hurdle of 1528. To the downside however, further tests of the 1380 area might prove to be the bulls undoing. We look for inspiration from the dollar and ICE 'C' once more.

Daily Coffee Market Outlook

2009-10-14T03:44:00.000-07:00

NY- Buy (2)- Yesterday saw choppy trade accross the board in NY as early strength turned to weakness before a recovery ensued in late trading. A weak dollar was the order of the day (again), and one must wonder how much further the greenback has to fall; albeit, how much longer ICE 'C' can react to it. Overnight macro data showed that China's exports fell less than economists estimated and exports dropped the least in 11 months in September, adding to evidence that the global economy is emerging from its deepest post-war recession. Import gains show that China is playing a greater role in driving the recovery in both the region and the global economy. All this of course is a positive for equity markets, and, you guessed it, a negative for the dollar. Despite a hesitation to rally and amid choppy trading, we remain bullish for NY and see any dips as a buying opportunity- as surely do others- arguably why the market recovered so strongly in afternoon trading yesterday. To the upside, resistance lies at 141 and 146.5. To the downside, be wary of any breaks below support at 133.5.

Liffe- Buy (1)- Yesterdays dip that took place hand-in-hand with NY weakness broke through 1445 support in spectacular style as some 300 stops were triggered to the downside. This sent LDN tumbling to 1388 before regaining its composure somewhat and recovering back towards the 1440 level. The market appears to be well and truly stuck in what can only be described as a loose consolidation zone between the high 1300's and the high 1400's. However, despite only a 'weak (ish)' conviction we still see LDN as having the potential to challenge the September highs once more and regard yesterdays price action as a mere setback on its upward path. Bargains were there to be had yesterday and stopcatchers did very well indeed. To the upside, we look for a challenge and break of 1488 for a rally to 1528- amid strong equities and a weak dollar, this is achievable in the short to mid term. To the downside, a challenge of 1340 support would see us adjusting our focus.

Daily Coffee Market Outlook

2009-10-13T04:05:00.000-07:00

NY- Buy (2)- There was thin trading accross the board yesterday as the US enjoyed its thanksgiving holiday. Morning weakness turned to afternoon strength as the Dec contract, encouraged by a weak dollar, finished up 240 cents, closing just below earmarked resistance at 138.30. According to data compiled by Bloomberg, central banks are moving away from the dollar at an alarming pace. Nations placing new money in reserve reportedly moved 63 percent into the Euro and Yen in the period from April-June this year; one feels that as long as abundant dollars ar available at no cost the world is not so likely to perceive them as the predominant reserve currency. In light of this and the effect a weak dollar is having on ICE 'C', we see this as extremely bullish for NY. So long as a close above 138.30 is achieved today, look for fresh highs to 141.70 and a possible medium term assault to 146.50. On the downside, expect to see demand at 133.50.

Liffe- Buy (2)- London finished up $9 dollars yesterday, and it is beginning to look as if a base is being formed above 1445, the key level of the past few weeks. With the dollar on the back foot and not looking to take the initiative any time soon, we are reasonably bullish for LDN. However, the market does apear to be in some sort of a consolidation phase between 1445 and 1528; as such we would look to exploit this by buying any dips towards the former, the initial target becoming the latter. NY is likely to give some direction to the market and further strength should give LDN the encouragement it needs. A break above 1528 opens the door to 1545 initially, then stronger supply is expected at 1590. To the downside, 1445 and 1400 are your support levels.

Daily Coffee Market Outlook

2009-10-12T04:05:00.000-07:00

NY- Sell/Neutral (1)- The US market holiday should keep volumes light on ICE 'C' today following the previous weeks rally. Bernankes' comments on Friday hinting at interest rate rises sooner rather than later will likely weigh on the market and keep speculative interest looking to the downside. Failure to break and hold above 138.5 resistance may prove to be critical and we see potential towards 133.50. On the upside, the consistent weakness of the dollar and rallying stock market indices could give the market stability in the face of this downward pressure. On the whole and in the face of low interest, we maintain a neutral albeit bearish stance today and look for dips towards 133.50 as a buying opportunity.

Liffe- Sell/Neutral (1)- Like NY, we see very little reason to get excited in LDN today in the face of the US holiday. Volumes are likely to remain light, and interest reasonably low. The dollar weakness looks to continue playing its' bit-part in the steering of LDN as is any continuing equity strength. We highlight resistance at 1488 and then further to 1527 on the upside; to the downside, 1445/50 and 1400 are likely to give some semblance of support.

Daily Coffee Market Outlook

2009-10-02T03:54:00.000-07:00

NY- Sell (2)- US Non- Farm Payrolls, arguably the highlight of the months macro economic data get release today and analysts are expecting another rise in claims and further job losses. Speculation is beginning to abound that rising unemployment will dampen global economic recovery; combined wit this weeks run of poor macro data gives enough reasons to doubt whether the scale of the rally in equity markets since march is justified. We continue our bearish outlook and look for further falls towards 119/120 on the back of a stronger dollar and weak equities.

Liffe- Sell (3)- Traders got the close they were looking for yesterday below 1372 opening the doors for further losses. In tandem with the beginning of the harvest and expectations of another bumper crop in Vietnam, weaker dollar, and weaker equities, we see the possibility of a fall to 1336, maybe even going into the end of the week. Technically, LDN looks very weak indeed.

Daily Coffee Market Outlook

2009-10-01T04:02:00.000-07:00

NY- Sell (1)- ICE 'C' enjoyed an up day Wednesday closing 230 cents to the good on the close. However, coffee fundamentals appeared not to have been the driving force behind the rally, rather the weakness in the dollar that has been such an important factor of late. On the macro front, further good news came from the IMF who raised its forecast for global growth next year to 3.1%, up from its July forecast of 2.5%. Emerging Asian economies appear to be the main drivers of this growth, but the IMF warned that the recovery would be 'weak by historic standards' and said restoring banks to health remains a priority. Questions persist as to what the exit strategy from record government stimulus will be. As leaders congratulate themselves on the 'efficient' use of taxpayer money, saving the world from certain economic meltdown and returning a tidy profit while so doing, we ask the question- 'is the stock market rally the exit strategy'? None of this bodes well in the medium to long term for equity markets or the dollar. We continue our bearish outlook for NY, looking for further weakness to 119/120.

Liffe- Sell (2)- LDN didnt react as favourably to improved macro economic sentiment as one might have expected and volumes remained thin. Having said this, it appears equity markets and the weak dollar have been the main driver of LDN of late as opposed to fundamentals such as Typhoon Ketsana. It appears the market is 'waiting' for further speculative shorts to re-emerge; a dip and close below uptrend support at 1372 is likely to encourage the specs to get involved once more and we see further falls likely, initially to 1336, then 1275.

Daily Coffee Market Outlook

2009-09-30T04:06:00.000-07:00

NY- Sell (1)- Market bulls embraced a small month over month uptick in the Case-Schiller index yesterday as further proof that all is well with the recovery. House prices rose 1.6% from the previous month, funded in part by a tax credit. Overnight data releases also heralded 'good news' as Chinese manufacturing rose and the IMF cut its' estimates of bank writedowns. Stocks inevitably rose on the back of this with Europes' benchmark index posting the best quarterly advance this decade, and the dollar resumed its' decline. Although sceptical the rally will continue at such a pace, it would be foolish to discount its' impact in the short term; As such, we see NY strengthening in very short term, and would look to sell rallies to 128.5/129. However, we remain bearish in the medium term with the future of the subsidy for first-time homebuyers uncertain as the US government is expected to hit its $12.1 trillion debt ceiling this autumn. Some analysts predict another downturn in house prices, barring any government intervention, while citing another two years of supply waiting to clear through foreclosures. We are looking for a challenge of 119/120; only a strong rally and close above 135 would have us looking to the upside once more.

Liffe- Neutral/Sell (1)- LDN continues to trade around the 1390/1400 area as opposing forces keep the market in a fairly tight consolidation channel. Indonesian selling came into the market late yesterday and anticipation of a strong crop number from Vietnam for the new season is of interest; however, the typhoon sweeping accross Asia and strength in equities/weak dollar looks to absorb supply and keep the market perky in the short term. With this in mind, traders are likely to be kept guessing, and as such we remain fairly neutral in the short term. Medium term, we see the possibility of a challenge towards 1275 pending a close below 1372. On the upside, resistance can be seen at 1420 initially, with stronger supply in the 1445/1450 area.

Daily Coffee Market Outlook

2009-09-29T04:00:00.000-07:00

NY- Sell (2)- NY was reasonably quiet yesterday as traders looked to make sense of the G20 mumblings and dissect the impact caused by forex movements at the end of the week prior. The equity rally did little to perk the bulls into action and small selling of Dec continued, the contract finishing 55 cents down on the close. As such, we maintain our bearish outlook and look for a dip below support at 126 in the short term. A close below here leaves the market open to further losses and a possible test of the August base formed at 119/120.

Liffe- Sell (1)- LDN appeared to be bouyed somewhat yesterday finishing $5 up on the close. Most likely, this was supported by stronger equity markets and a weaker dollar. However, as we highlighted before, short term consolidation was predictable and the small rally does little to change our outlook. Should the market climb today, we look to sell rallies with a view to closing below the uptrend at 1370. Weak support lies at 1388. To the upside, only a close above 1445/50 would give the bulls renewed vigour.

Daily Coffee Market Outlook

2009-09-28T04:01:00.000-07:00

NY- Sell (2)- Policy makers this weekend signalled the global economy isnt strong enough for governments to withdraw their stimulus measures. IMF Director Strauss-Kahn told a conference that policy makers 'need to secure the recovery before we address the problem of inflation and how to end stimulus packages'. The G20 leaders said they would 'avoid any premature withdrawal of stimulus' and acknowledged that the global recovery remains dependent on emergency government money. This leads us to question whether everything good that happened in the last six months is sustainable. As such, we remain bearish NY, keeping in mind the negative impact that these comments are likely to have on global equity indices and the strengthening of the dollar as a risk-aversion play. To the upside, 128.5 becomes resistance (moderate), followed by the 133.8 pivot where we saw downside stops triggered so dramatically on Thursday.

Liffe- Sell (1)- LDN closed unchanged going into the weekend on Friday halting the agressive slide seen last week. Despite early losses, support at 1391 held (albeit was not broken by more than $10 on the open), thus signalling stability for now. We remain bearish but acknowledge consolidation in the near term. 1420 will provide (weak) resistance to the upside before stronger supply at 1449. Look to sell rallies to 1449 with the goal of breaching (and closing below) support at 1391. A fall below here and 1336-1275 become our next medium term target.

Daily Coffee Market Outlook

2009-09-25T04:53:00.001-07:00

NY- Sell/Neutral (1)- The G20 meet in Pittsburgh this weekend to discuss policy coordination and tighter banking regulation. Following the 'wait and see' attitude deployed at the Fed rate announcement, many commentators are looking towards a reversal in rates and a withdrawal of the extraordinary stimulus measures that have helped bouy demand for riskier assets. Kevin Warsh, the Federal Reserve Governor, said the US may need to be as aggressive in reversing its actions to revive the economy as it was in starting. The recovery in stock markets over the last six months will certainly have pleased policy makers; however, a U or even W shaped recovery is still a strong possibility. Amongst the posturing and congratulatory back slapping leaders this weekend ought to be wary of counting their chickens just yet.
Following yesterday 'collapse' amid stop triggering below 133.80, we choose to remain fairly neutral today. Our near term downside target of 128.50 was reached (and held), and we may see some consolidation above here in NY today. A close below however, and support and 119/120 from the previous uptrend comes clearly into focus.

Liffe- Sell (1)- LDNs' fall was just as dramatic as its rally seeing Nov drop around $100 this week. Selling was given momentum from a combination of NY weakness, stops below 1449 and dollar strength. Our noted support at 1391 held to the dollar however, and this may help to stabilise the market somewhat. In the medium term, we see further weakness as longs look to liquidate and certified Liffe stocks remain high; a close below 1391 brings support at 1336 firmly into view with the prospect of re-visiting the June low of 1275 a very real possibility. Short term however, look for sideways consolidation going into the weekend (G20) and sell rallies towards 1420/1449.

Daily Coffee Market Outlook

2009-09-24T04:22:00.000-07:00

NY- Sell (2)- The FOMC said it will maintain its zero interest rate policy for an 'extended period' in a statement issued after yesterdays meeting. Although the committee recognises that the economy is likely to be weak for some time, it highlighted an increase in housing market activity and said household spending 'seems to be' stabilising. One begs the question, is Bernankes' optimism influenced only by a strong turnaround in the stock market? The apparent lack of conviction in the statement suggests the Fed may be playing for time after smoothing the road for 'market forces' to support a strengthening of economic growth. One thing is clear however, the US economies' return to growth is insufficient to withdraw stimulus just yet. We remain bearish NY in the short term and look to sell rallies noting resistance at 139. A close below 133.80 could see long covering and further losses to the 128/129.5 zone. A convincing close above 139 is needed to get the rally back on course.

Liffe- Sell (1)- LDN still looks vulnerable to further losses despite the breach of 1449 and subsequent rally on Tuesday. The sell-off proved to be somewhat of a false-break, the rejection of which creating a 'hanging-man' candlestick chart pattern. Despite the bullish ramifications of such a pattern, LDN has been unable to capitalise, aided in no way by the dollar or equity markets. Between 1449 and 1527, November Liffe appears to be 'in limbo'; a break and close through either level required to interest traders once more- low volume seems to reflect this. We remain bearish (albeit weakly), and see more risk to the downside.

Daily Coffee Market Outlook

2009-09-23T04:53:00.000-07:00

NY- Sell (2)- NY surprised to the upside yesterday casting fresh doubts as to whether the recent rally has stalled or merely consolidating before taking another leg higher. A weaker dollar once more gave traders the encouragement they needed, coupled with equity strength and commodity strength overall. However, technically speaking, NY needs a close above 139 to signal a more significant Northward assault; 141 remains the first target, 146.75 further on. All eyes will be on the FED rate announcement this evening where the level is expected to remain unchanged. More importantly though are the comments released afterwards which some analysts believe will contain hints towards the future of quant easing (or lack of) and hawkish rhetoric. Short term then we are sellers towards 139 but loath to take a position overnight. Post announcement, we hope the medium term path of ICE 'C' will be somewhat easier to read.

Liffe- Neutral (1)- LDN suffered in early trade despite dollar weakness. However, by the time NY opened in earnest Robusta enjoyed a massive turnaround, rallying from a low of 1445 to a high of 1486. Thin trading certainly played a part in contributing to its volatility but one must assume that traders focussed on the NY rally as a guide to bargain spotting. This begs the question, has the rally well and truly ended or is LDN merely taking a breather and regrouping? I would argue the former but between 1449 and 1528 it remains anyones guess. Look to sell on a close below 1449 which would open up potential for losses to 1400 and 1350. Intra-day though, the range trade looks to be a strong play. As mentioned above, the FED rate announcement this evening could be pivotal.

Daily Coffee Market Outlook

2009-09-22T05:45:00.000-07:00

NY- Sell (1)- Despite early gains, NY settled nearly half a cent down yesterday, most likely on the back of weekend commentary citing the equity rally/dollar decline as overdone. However, overnight, water was poured onto the naysayers fire as forecasts from the Asian Development Bank provided evidence that the global economic recovery is accelerating. Who should one believe in such a situation? This is a question we will leave to minds far more knowledgeable than ours. Nevertheless, ICE 'C' appears to have run out of steam somewhat with the 138/139 level proving to be stiff resistance. With this in mind and with bearish equity sentiment beginning to rear its' ugly head we see risks to the downside in the short term and look to sell rallies towards 138. Support lies at 129.50, and this would be our initial target.

Liffe- Sell (2)- LDN finished $34 down yesterday, breaching weak support at 1500 and the congestion zone at 1480. It appears that the combination of negative market sentiment over the weekend and inability to breach resistance in the 1520's gave longs all the evidence they needed to liquidate positions; and traders on the sideline the encouragement to jump into the market, albeit short. Support now lies at 1449- a close below here and there lies very little in the way of a fall down to 1400, the next level being 1340.

Daily Coffee Market Outlook

2009-09-21T05:14:00.000-07:00

NY- Buy (1)- All eyes this week focus on Wednesdays FOMC meeting, citing the possibility that the FED committee could announce a change to the QE programme or otherwise signal a tightening bias. Commentators this weekend were speculating that the 6 month rally in equities has finally outpaced prospects for profit growth. Indeed, Joseph Stiglitz, the Nobel Laureate says the US 'would be lucky to be out of the recession by 2012'. Coffee has certainly benefitted of late from the equity rally and associated dollar decline; however, the correlation is often tenuous and sometimes coincidental. As such, we still remain moderately bullish NY, although see some prospect for sideways consolidation in the short term. Looking to the medium term, we eye a challenge of 141, (and short covering on triggered stops). However, the threat of bearish global market sentiment can never be ignored and as such would look to sell on breaks above 141 on a short term basis, especially if macro data began to point downwards once more.

LDN- Neutral/Sell (1)- LDN trade has not been so closely linked to NY over the last few sessions and this was especially evident on Friday when the market plummetted to 1480 ($44 down) before traders sniffed out a bargain and it settled only $11 down at 1513. Despite the afternoon recovery, it's hard to see much more potential to the upside in the short-term; upside momentum appears to have slowly disappeared and Nov has failed to breach resistance in the high 1520's in four of the last five sessions. Combined with what seems to be a shift in sentiment, our compass is beginning to shift Southwards. This is not to say that LDN will not go up- certainly, intra-day Nov has potential to close up a few dollars or so (or down, hence our neutral stance at these levels). As such, we would look to sell in the high 20's, eyeing a short-term pullback towards 1480/1449. A close above 1530/1545 would be needed technically before we start looking Northwards once more.

Daily Coffee Market Outlook

2009-09-18T03:47:00.000-07:00

NY- Buy (1)- Another strong close for NY yesterday, up 1.85 cents, brought Dec closer to the August highs (and our highlighted resistance) at the 141 level. This came amid a backdrop of climbing stocks and a weaker dollar. However, early weakness in stock indices today and many analysts are pointing out that the rally is running out of steam; optimism regarding the economic outlook remains, but bullish sentiment is looking a bit premature. Concern that Lloyds needs to do more to clean up its' balance sheet revived speculation that financial institutions have yet to recover from the $1.6 trillion in losses and writedowns sparked by the seizure in credit markets. As a result, we see NY (which has benefitted greatly from recent bullish euphoria) consolidating somewhat going into the weekend. Support remains at 130, and we see dips in the short term as a buying opportunity. In the medium term, we remain bullish and look for gains to 141 and a challenge of the may/june high of 146.5.

Liffe- Sell (1)- Despite yesterdays gains and hold above resistance at 1512, resistance in the high 1520's is proving stubborn and difficult to breach. Most likely, traders are seeing this area as the perfect level to offload long positions and book profit. With the stock rally looking rather tired, we see some consolidation in LDN in the short term as the market takes a 'breather'. Medium term, 1545 is still in range; however, to continue the upward trend, and with no macro data on the horizon, other factors such as a weaker dollar will need to lend a hand. We look to (weak) support at 1500, and failing this, the next level is at 1449.

Daily Coffee Market Outlook

2009-09-17T04:36:00.000-07:00

NY- Buy (3)- NY had a fairly subdued day yesterday and closed relatively unchanged at 134.20, 0.4 cents down. Of note, were comments by former FED Chairman Greenspan who said that the next six months 'seem reasonably easy to anticipate: no inflation, good economic growth.' The former FED chiefs thoughts compared favourably with some analysts whose explanation of stock market gains centred around investors' belief in a strong recovery with low inflation. Perhaps the small fall in coffee reflected lack of interest in buying as an inflation hedge; more likely however, was a dip caused by longs taking profit. Despite this, we see further stock market gains, weak dollar and investor confidence as a positive for ICE 'C' and remain strongly bullish; near term, the target remains at 141, but note potential origin supply around the 138/140 level.

Liffe- Buy (3)- Technically speaking, yesterday was significant for LDN. We got the close we have been looking for at 1512, $10 up for the day. With this resistance level breached, we see further gains in the near term, and look for a rally towards the July highs of 1545. As in previous sessions, supply will begin to emerge at 1526/1528.

Daily Coffee Market Outlook

2009-09-16T05:07:00.000-07:00

NY- Buy (3)- A bullish commodity undertone prevailed Tuesday, led by oil, a weaker dollar, and stock market rally; NY settled higher once more at 134.60, 1.5 cents up on the previous days' close. The rally centred around the unexpected jump in US Retail Sales figures, the highest margin in 3 years. Enthusiasm was spurred further as FED Chairman Ben Bernanke commented that the recession could be over by now; even cautionary notes that the recovery will be slow and unemployment will continue to be high into the foreseeable future couldn't dampen spirits. With heightened consumer spending and the associated inflation expections, coffee benefited; and we see this trend continuing into the short term. Resistance lies at 141, and this is our target for now. With support at 129/130, we see any dips towards here as a further buying opportunity. Supply could begin to filter into the market from 138 onwards as origin sellers look to take advantage of higher prices, however renewed spec interest could absorb this.

Liffe- Buy (2)- Despite early strength and attempts to breach resistance at 1512, LDN couldnt take the initiative once more and it settled at 1502 ($3 down), but to all intent and purposes, relatively unchanged. With NY on the offensive, one would think LDN would follow suit; however, one must bear in mind that LDNs' move came the two weeks preceeding ICE 'C' and it has done $100 to date in September. We remain (stubbornly) bullish above 1449, and see demand appearing around 1480. Once more, the stability hurdle stands at a close above 1512 for gains towards 1545.

Daily Coffee Market Outlook

2009-09-15T02:00:00.000-07:00

NY- Buy (3)- Monday was all about ICE 'C'. Dec NY traded at a 1 month high yesterday to close at 133.10, 6.5 cents up on the day. The move initially came through low liquidity and soon gained momentum as stops were triggered through the 129/130 resistance area. Lack of origin selling contributed to the rally led by fund buying and short-covering. With the 129/130 level well and truly breached, we see little in the way of resistance to halt the market onslaught and see further gains to 141. We would look to buy dips ahead of 130 using 140 as a profit taking opportunity; we note, however, low open interest could indicate the rally may run out of steam before this level.

LIFFE- Buy (2)- LDN, bouyed by the strong NY rally climbed to within $2 of 1512 resistance yesterday before pulling back and settling at 1505. We are bullish, and have been for some time, however, the elusive close above 1512 needed from a technical perspective has not materialised (yet). Once more, there is little to drive the market fundamentally and so eyes will be drawn towards dollar strength and stock market direction. NY may provide the biggest cue however, and further gains may give LIFFE traders the encouragement needed for a rally towards 1545.