Coffee Futures Prices Cool on Lower Production Levels

December 22, 2016 12:47PM CST

Prices in coffee futures are cooling on lower production levels and quiet pre-holiday trade.

The March contract in coffee futures was down 1.87 percent at 141.85 in mid-day commodities futures markets trading.

Analysts say Brazil producers are exporting less, while producers in Central America are also limiting exports due to the price weakness in the commodities futures product. However, the Honduras is trying to acquire the crop sold. Ideas are that Arabica production is strong in Latin America. London has been stronger due to the high Robusta prices in Brazil and continued reports of little on offer from Indonesia and Vietnam, and price trends in coffee future are up.

Coffee-H17-Daily-Chart

The remainder of commodities futures markets may be quiet, but the economic calendar contains a slew of significant reports Thursday ahead of the U.S. Christmas Day holiday, which falls on a weekend this year.

The calendar includes the third estimate of third-quarter GDP, which grew 3.5 percent compared to economists’ forecasts of a rise of 3.2 percent, according to the U.S. Department of Commerce.

Growth was the strongest since the third quarter of 2014 and followed the second quarter's 1.4 percent pace. Output was also boosted by upward revisions to business investment in structures and intellectual property products, which contributed to the Federal Reserve raising interest rates last week.

Durable Goods Orders for the month of November declined 4.6 percent from October to $228.17 billion, according to the U.S. Department of Commerce Department. Economists surveyed had expected a 5 percent drop

November Personal Income rose 1.4 percent after increasing by the same margin in October. Meanwhile, Personal Spending rose 0.2 percent in November after an upwardly-revised 0.4 percent increase in October.  Economists expected consumer spending to rise 0.3 percent for the same month, according to the U.S. Department of Commerce. Consumer spending accounts for more than half of U.S. economic activity.

November Leading Indicators were flat in November 124.6, unchanged from September, according to the U.S. Conference Board.

Finally, the Personal Consumption Expenditures (PCE) price index was unchanged in November after a rise of 0.3 percent in October. In the 12 months through November the PCE price index rose 1.4 percent after increasing by the same margin in October.

Ahead of the holiday weekend in the U.S., the December University of Michigan Consumer Sentiment report is due Friday, as well as November New Home Sales. 

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