The coffee market recovered on Monday on short covering. Following a firm opening, solid buying was attracted that boosted the prices above the 170-price level. The most active contract for December delivery closed with a gain of 790 points at 177.70 cents per pound. The price action was accompanied by high volume with 61,004 contracts traded including 17,862 switches. The rally was almost unobstructed due to very limited selling from both commercials and speculators. Origins with little coffee available are awaiting the harvest and the oversold market discouraged the spec selling. Friday's COT report showed funds already with over 3,000 net short position as of last Tuesday, suggesting a short net position near to 10,000 lots by Friday. Brazil’s currency gained more than 2 % to BRL 5.1666, adding support to the coffee market. The certify stocks remain at 384,795 bags, however pending increased today by 20,200 bags for a total of 101,298 bags in the port of Antwerp and 646 bags in the port of Hamburg. According to different sources, some 200,000 bags are being expected to arrive to the terminal.
Robusta JAN23 contract settled at $1853 +4 with a 1879/1846 range. Despite Arabica being 7 cents + higher Robusta just didn’t get going. Not able to break above Fridays high. Commercial selling was noted early in the session. Volumes remain strong with 11k lots trading on the JAN23 contract, and 2.9k Jan/Mar trading between 11/17. Jan23 2000 calls LU traded 2000x @ 32 / Jan23 1750 puts LU traded 1000x @ 34
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Coffee futures fell on Friday amid a bearish fundamental outlook for prices. The benchmark contract for December delivery closed 905 points lower or -4.8% at 169.80 cents a pound. China's covid lockdowns have raised fears of deteriorating demand. The threat of a recession in Europe and the escalation of the war in Ukraine have been adding to the bearish sentiment of the participants. On the technical side, the break of the support area at the 180 level accelerated the decline by triggering more selling by automated trading programs. Volume reached 81,990 lots, including 26,232 switches. Certified stocks fell 670 bags to 384,795 total bags. Pending grading increased by 25,095 bags to 81,744 bags.
Non-commercials invert position and are now net short by 3,084 lots in week to October 25. Robusta JAN23 contract settled at $1849 -29 with a 1883/1833 range. A new break lower with a fresh wave of selling. This time it seemed the commercial buying that had been absorbing much of the selling was not around quite in the same volume as previous sessions. Flat price volumes remain strong with 11.5k lots trading on JA23 contract and 3.4k JAN/MAR going through between 10/16. Huge day in coffee options both KC and RC. Topping the board was the JAN 1900/2000 PS LU which traded 4000X @ 33 |
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