Coffee Futures Suffer Sharp Fall
Arabica coffee futures extended losses on Friday as funds continued to exit the marketplace. The most active contract for July delivery settled 5.35 cents or 2.6% lower at 200.75 cents a pound. The open interest dropped 2,723 lots yesterday, reflecting the exit of funds. The Arabica market lost 23.25 cents during the week or 11.4%, the largest weekly loss since July 2021. The specs selling have been triggered this week, as the important levels of support have been violated by the prices. A general weakness of the commodity complex adds the bearish sentiment. Arabica cert stocks increased by 7,142 bags to 689,178 bags. COT(CIT) NY Arabica . Non-commercials cut net long position by 1,728 contracts to net long 48,973 in week to April 30. In London, the Robusta market closed sharply lower. The active July position settled $139 or 3.6% down at $3,541 per ton. A hefty fund liquidation pressured the market that lost 18% from last ‘s week historic high. Overbought conditions and reports of some rains in Vietnam caused the selling. This has naturally seen the algorithms track momentum lower trigger stopped a key resistance areas and eroding heavy roaster buying on route to the intraday lows. Technically outlook would still allow further losses, but participants will focus on oscillators nearing oversold conditions as we touch the lower Bollinger band averages.
0 Comments
Arabica coffee futures fell significantly on Thursday influenced by a substantial drop in Robusta prices in London. The drop accelerated after prices fell below the lows of the previous two sessions, attracting sales from speculators and triggering selling stop orders. The most active contract for July delivery at the ICE exchange in New York, closed 9.90 cents or 4.5% lower at 206.10 cents a pound. The volume increased reaching 57,435 lots. Likewise, the volume of switches was high in 14,154. The fall impacted the nearby July/September switch which lost 20 points ending at 1.75 cents and the forward curve which lost backwardation but remains inverted. Players have been adding shorts as the market failed to recover. The open interest increased 2,319 lots as of yesterday. The continue sell-off of the cocoa market added bearishness to the soft complex. Cocoa prices have lost 29.99% or $3,241 to $7,563 so far this week. The dollar retreated as focus returned to chances of interest rates to be cut or staying higher for longer time. Cert stocks increased 14,660 bags to 682,036 bags. Pending grading decreased 21,305 bags to 58,715. Today a total of 21,580 were graded, 14,735 bags passed and 6,845 failed.
Robusta Jul24 contract settled at $3,680 with a 3999/3620 range. No other way to describe todays activity other than a total collapse, $379 range. A move like this outside of weather markets is unheard of. Essentially the hedge lifting stopped and the recent roaster interest had eased which forced the speculative community to liquidate into a total vacuum. Sporadic commercial buying was defiantly noted but due to the fact there was very little ‘’resting’’ bids there was nothing there to absorb the relentless speculative bailout. Volumes were good for Robusta with over 25k lots trading on the July contract alone. Nearby structure weakened a touch seeing a 56/70 range on nearly 7k lots. Robusta Jul24 3500 puts vs 3780Δ25 traded 1000x @ 75, Robusta Nov24 3500/3000 putspread traded 750x @ 220, Robusta Jul24 4000 calls vs 3800Δ35 traded 750x @ 132. |
|