Coffee Comes Out Of Cold Storage
Forecasts for freezing temperatures in Brazil’s major
coffee growing regions spurred traders to cover shorts and led to gains of as
much as 7% early in Monday’s New York session. The market dropped back almost immediately after the initial gap-up rally and left a reversal tail, after weather forecasts later in the day said
the chance of a freeze by this weekend were significantly less than originally
predicted. Coffee, the leading contract on the
Implosion-5 List,
added 2.95 to close at 86.53.
Cocoa remained subdued and traced an inside day after
reports of unrest in the capital of the Ivory Coast, the world’s largest
producer of cocoa. Grindings, an indication of demand, are expected to be
slightly higher than last year. September cocoa fell 3 to close at 845. Cocoa
should be monitored for a larger-than-normal move due to its standing on the
Multiple Days Low
Volatility List.
Stock index futures closed narrowly mixed.
Better-than-expected earnings out from Alcoa
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Dow futures
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gain to 10,750.0.
September S&P futures
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before hitting a two-week high above 1500.
Nasdaq 100 futures
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were weighed down by news that JDS Uniphase
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a supplier and maker of optical communication devices and semiconductors for $40
billion. JDSU accounts for approximately 4% of the Nasdaq 100 index
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and ended 15 points lower on the day at 101 1/8.
The yen is making a comeback from a week of declines
after the Bank of Japan Governor Masaru Hayami made comments implying the
central bank would soon raise interest rates. Japan has held interest rates to
near-zero levels since March of 1999 as a way of reviving its stagnant economy.
Interest rates are nearly 6.5% higher in the US than in Japan and higher yields,
along with a rising economy, would be bullish for the yen.
Grains have been filling out the
Implosion-5 List and
continued lower Monday as favorable growing conditions augmented the likelihood of a good crop. Corn
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soybeans
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down 3 3/4 and 1 1/2, respectively. December wheat
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gap-down levels to end 3 higher at 274 1/2.
Energies ended mixed, with heating oil and crude oil
falling while unleaded gasoline moved to the upside. The Clinton administration
directed the Department of Energy to use its "existing legal
authority" to start a two million barrel home heating oil reserve in the US
Northeast before the winter heating season. The announcement would release crude
oil from the Strategic Petroleum Reserve (SPR)–presumably to be turned into
heating oil–to prevent shortfalls in the region this winter.