Arabica coffee futures was under pressure again on producers selling ahead of the beginning of the delivery period for the December position. The most active contract for march delivery settled 205 points lower at 156.35 cents a pound. Commercial selling reflected the last-minute price fixing origin sales that were waiting for a possible recovery in prices before the FND next Monday November 21st. The action has caused the forward curve to go back to contango. The Z/H switch had a range of -2.85/-3.80 with a settlement at -3.65. At the same time, specs added short positions encouraged by the continued weak performance of the prices. The weakness of the Brazilian real and the Colombian peso added bearishness to the market. Certified stocks at the ICE exchange were almost unchanged at 484,089 bags, well above the 23 -year low of 382,695 set on November 3. Pending grading increased by 7,589 bags to 584,688 bags.
Robusta JAN23 contract settled at $1818 +26 with a 1828/1769 range. Volatile day for Robusta, much of the day was spent shadowing Arabica and grinding lower testing new lows with some light origin selling following the market lower. Later on, in the session a wave of roaster buying triggered a relatively small spec short covering rally pushing flat price through intraday resistance levels. Half decent volume on the JAN23 contract with a touch over 10k contracts changing hands. JAN23/MAR23 had a 12/29 range on 3.2k lots. Jan23 1950 calls vs 1827Δ22 traded 2000x @ 19 - Mar23 1875 calls vs 1760Δ30 traded 2500x @ 47.
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Arabica coffee consolidated on the bottom range of yesterday’s session. Previous day long liquidation had most traders waiting on the sideline. A brief attempt on the positive side was noted on the early hours with not much to build upon, coffee market continues to trade in oversold territory. The demand seemed to have a little help with the changes in Chinas covid restrictions, but inflation news maintain the pressure. In the UK October inflation was reported at 11.1% (annualized) vs 10.15 in September, giving us the highest number in over 40 years. More pressure on the Bank of England to maintain its current restrictive policy, even to tighten it if they see that inflation does not fall. The most active contract March settle 110 points lower at 158.40 cents a pound. Total volume was 45,552 lots including 12,331 switches. The Z/H switch had a range of -1.85/- 3.10 with a settlement at -2.90. Today the certified stocks increase by 17,078 at 485,369 bags. The pending grading decrease by 21,617 bags for a total of 577,099 bags. Total graded 21,617 bags, Failed 4,539, Passed
Robusta JAN23 contract settled at $1792 -10 with a 1817/1774 range. Another day of low volumes and a grind lower. On the open Arabica tried to regain some of the losses from yesterday but this was short lived, and once that early buying dried up, we once again tested the lows bringing more selling into Robusta. The fear is there is very little commercial buying around and the origin will have volume to sell in the near future so we could start hitting vacuums of liquidity. JAN/MAR had a pretty tight range +/10/+15 on <1k lots. Jan23 1900 call traded 500x @ 23 LIVE. |
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