Arabica futures settled higher for third consecutive session supported by commercial short covering. The firmness of the London market also continues to boost Arabica prices. The most active contract for May delivery closed 585 points higher at 203.60 cents a pound. Volume expanded to 108,026 lots, including 35,950 switches. The rise has surprised dealers that have been forced to cover positions. Non-commercials have been adding long positions as trade and the industry have been very bearish for Arabica, with many reports released in recent days highlighting a negative point of view. It is also important to remember that the majority of industry forecasts are seeing a surplus of Arabica coffee for the current coffee year. There has also been research and data that shows that the once strong biennial crop in Brazil is lessening, and production is stabilizing from year to year, indicating that even in an “off-year,” Brazil’s crop could remain very high should it be spared any weather damage.
Technically, breaking of the 200-level triggered good buying. However, overbought conditions made the market vulnerable for a correction. The open interest increased 5,154 lots as of yesterday to 247,741 lots, evidencing the new long positions. Cert stocks increased by 12,603 bags to 616,682 bags. Pending grading added 5,237 bags to 73,888 bags. A total of 21,713 bags were graded. 12,603 passed (2,673 BR, 1,925 GU, 275 ME, 4,410 NI, 2,250 PE, 320 TZ, 750 VE), and 9,110 failed ( 1,100 GU, 1,100 ME, 4,950 PE, 960 TZ, 1,100 VE). Robusta May24 contract settled at $3812 +149 with a 3838/3634 range. Another strong rally with further commercial hedge lifting being the main driver of prices higher. A real lack of meaningful selling was present to absorb the buying. Structure remains stubborn with no real movement, May/Jul saw a 81/88 range on 10k lots. Outright volumes were the highest we have seen for months with 19k lots trading on May24 alone. Another busy day in the option space with the highlights being: Robusta Jul24 2800 put traded 2800x @ 11, Robusta Jul24 3500/3250 putspread vs 3660Δ16 traded1 1500x @ 84, Robusta Jul24 3400 calls vs 3678Δ72 traded 1000x @ 376, Robusta Jul24 3500/4000 callspread vs sell 3100 put traded 700x @ 200.
0 Comments
Arabica coffee futures on the ICE exchange settled higher today on speculative buying. The most active contract for May delivery gained 295 points or 1.56% to end at 191.80 cent a pound. With the London market closed, which has provided support recently, traders' action was encouraged by technical performance. Good support against the lows of the previous two sessions, triggered the spec buying. The open interest reached 240,465 lots the highest since March 2023. An increase of 22,465 lots since march 19th evidences the new longs that have been added during the last two weeks accompanying the rise . The weather in Brazil continue favorable for the northern producing areas with moderate rains, but dryness is expected to the south. The dollar firmed today adding pressure over the Latin America currencies. Arabica cert stocks were unchanged today. Pending grading added 6,415 bags to 80,296 bags. No grading reported today.
|
|