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April 10, 2008

CLOSING N.Y. COFFEE: PLUMMETS TO $1.3000, ORIGIN SELLING AND FUND LIQUIDATION

April 10-(15:20 ET)-May coffee futures closed sharply lower after plummeting to 
the $1.3000 support before midsession in a move that was initiated by specs when 
the contract failed to climb to the $1.4000 level. Traders were expecting to trigger 
a large round of buy orders above yesterday’s high but the move failed to find 
follow-through and was followed first by profit taking, later by origin selling
and finally by massive rounds of fund liquidation that triggered sell orders and
panic selling on the way down.

The May contract settled 475 points lower at $1.3175.
The July contract settled 475 points lower at $1.3425.

The May contract last traded 525 points lower at $1.3125 trading in a 
range between $1.3000 and $1.3795.
The July contract last traded 530 points lower at $1.3370 trading in a
range between $1.3250 and $1.4045.
The balance of contracts last traded 490 points lower to 540 points lower.
The kck8/kcn8 spread last traded 5 points higher at minus 245.
The kcn8/kcu8 spread last traded 10 points higher at minus 240.



The May contract opened 45 points higher at $1.3695 and widened gains in early 
action but failed to hold and turned around to trade without a clear trend inside 
a narrow range during the initial hours of trading. The contract fell to the 
$1.3660 mark by 8:00AM in speculative action. Industry provided support and May 
to July rollovers lifted prices near the $1.3750 mark. Specs took profits an the 
contract returned to trade around the $1.3700 level in uneventful action at midsesion.
A new upside attempt took place and specs managed to pierce yesterday’s high, buy
orders were triggered and the contract reached the session high of $1.3795. The move 
failed to attract new buyers and specs took profits, the contract fell below $1.3600 
and found support that allowed a new rebound to the $1.3700 level. Origin selling
emerged and the contract lost ground quickly, falling to the $1.3500 area where 
industry provided support for a few minutes. Funds started a round of liquidation
of long positions and prices lost ground quickly until reaching the $1.3300 level.
Buying from industry curbed losses again but after a brief and failed recovery 
attempt a new round of origin selling pushed prices to the session low of $1.3000. 
Selling vanished at that point and the contract recovered supported by industry and 
specs and reached the $1.3300 level by 1:00PM. Prices lost ground again and fell to 
below $1.3200 by the time of marking the settlement price. Action slowed down and the
contract followed a sideways pattern to finish the day slightly above $1.3100.
Technically, May delivery failed to reach the objective at $1.4000 and has returned 
to the levels of past week. While a rebound to the $1.3500 level seems likely a new 
attempt to pierce $1.3000 seems to be the next objective.

 

According to reports from the European Union green coffee imports in Spain during 
January 2008 were of 24,708,800 Kg. compared to 25,286,100 Kg. during the same 
period of 2007.
Main suppliers during the period were:

Country                  Kg.                   Euros              U.S. Per Pound 
                  2008         2007        2008        2007        2008     2007

VIETNAM        11,910,100  10,492,300   16,274,998  12,083,720   $0.8655   $0.7318
BRAZIL          3,469,300   5,633,400    6,397,355   9,533,103   $1.1709   $1.0755
COLOMBIA        2,218,500   1,599,300    4,811,244   3,371,781   $1.3745   $1.3364
UGANDA          1,925,900   1,496,500    2,746,769   2,146,303   $0.9036   $0.9100
NICARAGUA         851,500     281,300    1,685,204     560,619   $1.2536   $1.2664
INDIA             665,900     798,800    1,023,584   1,070,098   $0.9736   $0.8464
IVORY C           640,700   2,782,600      880,361   3,036,978   $0.8718   $0.6936
GUINEA            509,700           0      606,680           0   $0.7573   $0.0000
BELGIUM           471,800     108,700    1,014,105     221,440   $1.3618   $1.2918
NETHERLANDS       392,300           0      809,534           0   $1.3109   $0.0000
PERU              345,100     229,000      661,494     458,801   $1.2155   $1.2727
COSTA RICA        207,800      36,300      456,213      71,243   $1.3936   $1.2473
GERMANY           203,500     539,000      412,296   1,124,844   $1.2855   $1.3236
HONDURAS          184,700     147,600      366,840     246,344   $1.2600   $1.0564
GUATEMALA         139,100      92,300      284,780     174,979   $1.2982   $1.2027
TANZANIA           98,900     119,800      132,415     129,992   $0.8464   $0.6873
MADAGASCAR         69,000     118,200       96,955     142,749   $0.8909   $0.7636
ETHIOPIA           68,400     101,500      145,731     232,307   $1.3555   $1.4509
THAILAND           67,100           0       80,885           0   $0.7636   $0.0000
BOLIVIA            60,300      68,100      116,863     130,807   $1.2282   $1.2218
LAOS               32,700           0       40,620           0   $0.7891   $0.0000
INDONESIA          27,800     245,700       44,818     288,277   $1.0245   $0.7445
MEXICO             20,800      20,600       41,420      43,805   $1.2664   $1.3491
KENYA              20,400      53,300       67,161     116,280   $2.0936   $1.3873
CAMEROON           10,000     217,400       15,302     265,886   $0.9736   $0.7764
PAPUA NG            3,600      21,600        9,213      45,562   $1.6227   $1.3364
ITALY               1,200         200       13,044       2,149   $6.9173   $6.8345
FRANCE              1,000       1,300        6,292      22,600   $4.0027  $11.0600
U.K.                  200           0        9,110           0  $28.9864   $0.0000
ECUADOR                 0      38,000            0      81,658   $0.0000   $1.3618
EL SALVADOR             0      26,200            0      60,003   $0.0000   $1.4573
SINGAPORE               0      20,200            0      43,826   $0.0000   $1.3745
ANGOLA                  0      17,100            0      21,409   $0.0000   $0.7955

TOTAL          24,708,800  25,286,100   39,491,255  35,683,737   $1.0118   $0.8973



China coffee exports



In Kenya, coffee production has plummeted in the last 20 years, 
impoverishing farmers and denying the country foreign exchange.
A Coffee Board of Kenya (CBK) Director for Meru, Mr. Phares Kinoti, 
said production had gone down from 130,000 tonnes a year 20 years 
ago to barely 50,000 tonnes currently.
Earnings from the crop also dropped from Sh18.3 billion during the 
same period to Sh8 billion, Kinoti said and called for urgent measures 
to reverse the trend.
Coffee farmers lamented the high cost of production and poor prices for 
deliveries. About 2,000 farmers from 34 coffee societies in Meru accused 
the Government of neglecting the industry and impoverishing them.
They said the high production cost occasioned by increasing prices of 
fertilizers, chemicals, labour and farm implements has hindered efforts 
to revive the sub-sector.
"The Government is insensitive to the woes coffee farmers are facing from 
production to marketing. Efforts to revive the industry would be a pipe 
dream if the situation is not reversed," said Kinoti.
The farmers, however, appreciated the Government s intervention in writing 
off the first tranche of Sh641 million in debts and the Sh312 billion 
debts relief to co-operative societies growers.
"These efforts, coupled with the opening of the second window that allows 
for direct coffee marketing and operationalization of the coffee 
development fund are also positive gains to farmers," said Kinoti. Mr David 
Gikunda, the Meru coffee union chairman, challenged the farmers to modify 
their farming methods and abandon the outdated practices.
"Farmers should take coffee as a commercial venture. They should no longer 
take it as a hobby. Quality and quantity production of the crop is the 
secret because this would fetch good returns," he concluded.
According to a summary of weather reports, climate in coffee growing areas of 
Brazil will be as follows:
Today, Apr. 10, 2008
Partly cloudy to cloudy, with rainshowers and isolated thunderstorms 
in Minas Gerais, Rio de Janeiro and Sao Paulo. Other areas, sun and
few clouds.  
TEMPERATURE: Stable  MAX.: 35°C  MIN.: 14°C 
Friday, Apr. 11, 2008
Partly cloudy to cloudy, with rainshowers and isolated thunderstorms 
in Minas Gerais and Sao Paulo. Other areas, sun and few clouds.  
TEMPERATURE: Stable  MAX.: 35°C  MIN.: 13°C
Saturday, Apr. 12, 2008
Partly cloudy to cloudy, with isolated rainshowers in Minas Gerais 
and Sao Paulo. Other areas, sun and few clouds. 
TEMPERATURE: Stable  MAX.: 35°C  MIN.: 13°C   
Sunday, Apr. 13, 2008
Cloudy, with rainshowers and isolated thunderstorms in Sao Paulo.
Clear to partly cloudy, turning cloudy, with possibility of rain
in isolated areas at the end of the day in Minas Gerais and Rio de 
Janeiro. Other areas, sun and few clouds. 
TEMPERATURE: Stable  MAX.: 36°C  MIN.: 13°C      
Technically, support for May delivery is at $1.3000, while resistance is 
at $1.3750.
In London, May delivery closed $28 lower at $2,242 moving in a range between
$2,221 and $2,345. 
In the Tokyo market, May-08 Arabica settled -300 Japanese Yen at
Japanese Yen* 19,200 per 69 Kg. bag, equivalent to $1.2400 per pound.
In the Tokyo market, May-08 Robustas settled +200 Japanese Yen at
Japanese Yen* 31,250 per 100 Kg., equivalent to $3,064 a metric ton.
*102.29 Japanese Yen per US Dollar.

(END)   BINEWS   04-10-08  15:20 ET

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