Frost Fails To Ice Coffee

July 20, 2000
Marc Dupee

Coffee continued to reverberate in volatile trade as forecasts of freezing
temperatures this week failed to materialize in Brazil’s primary growing areas.
Although there have been scattered freezes throughout the country, the primary
growing regions did not get hit with as much of the plant-killing cold
temperatures
as initially anticipated.Â

The September contract fell 12.5% Thursday, for a cumulative two-day loss of
over 25%. Coffee ended 14.00 lower at 97.75. The volatility in this contract is
likely to remain high as reports trickle back about the extent of crop damage.
Some estimates peg the damage at 30% of the 2000-2001 in the Minas
Gerais area, one of the major producing areas.

The Street liked what it heard from the Fed Chief
Thursday in his twice-yearly testimony on the economy before the Senate Banking
Committee. Both
T-bond and 10-year T-note futures shot higher following the release of the text
of his prepared speech, just prior to Greenspan’s delivery before Congress. Sep T-bonds
(
USU0 |
Quote |
Chart |
News |
PowerRating), from the Pullback From Highs List,
screamed up 1 18/32 to 98 15/32 and 10-years
(
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PowerRating) closed 1-point higher
at 98 28/32. Bonds and notes had closed practically unchanged over the past two
days.Â

Bond Strategist Tony Crescenzi provided a table and
commentary highlighting how the odds favoring a sharp reaction in the bond
market following Greenspan’s testimony. Crescenzi pointed out that there has
been a historically high likelihood of a move of at least 1-point in T-bond
futures on the day of Greenspan’s twice-yearly speech. (Click
here to see the table and commentary providing analysis of the recent
historical effects of Greenspan’s Humphrey-Hawkins testimony on market
movements, or click on the following link: https://tradingmarkets.com.site/eminis/commentary/concredit/07192000-7293.cfm).Â

Citing unnamed sources, Bridge news said Saudi Arabia would raise oil output
unilaterally and contrary to its quota agreement with OPEC. Earlier this month,
the Saudis said they would raise production by as much as 500,000 barrels per
day. But with the majority of cartel-members already producing at full capacity,
the majority of OPEC wants to keep production quotas at current levels and get
as much as possible for each barrel of crude. The Saudis may release an
additional 250,000 barrels a day now. August crude oil
(
CLQ0 |
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Chart |
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PowerRating) closed .49
lower at 30.93, unleaded gasoline
(
HUQ0 |
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PowerRating) fell .0175 to .9589 and natural
gas
(
NGQ0 |
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PowerRating) closed at the lowest level since May 23.Â

September sugar
(
SBU0 |
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Chart |
News |
PowerRating) the leading contract on the Momentum-5
List powered to new contract highs and making good on an Off
The Blocks entry setup to end .35 higher at 10.31.

As pointed out in the Mid-Day Futures Market alert at the beginning of its move
Thursday, cocoa (CCU0) burst out of a 6/100 Low
Volatility situation and closed 30 higher at 886.ib

Frost Fails To Ice Coffee

BUY THE FEAR, SELL THE GREED

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