Arabica coffee futures on the ICE New York closed lower Tuesday. The reference month for December delivery closed 45 points lower at 195.10 cents a pound. Fund liquidations continued to put pressure on prices which fell to the 193.20 level in early hours. The funds’ liquidation has been triggered after the market broke a four-week consolidation area, last week. A better perspective for the Brazil 2022 crop and the concerns for a recession have fueled the bearish sentiment. Support at the 191 level and oversold technical conditions discouraged short players, causing a small price rebound for the end of the session. Volume was moderate with 36,877 lots traded, including 9,479 switches. Latin American currencies were mixed. The Brazilian real recovered 0.2% to BRL 5.2628, while the Colombian peso fell 0.3% to a new historical low of COP 4,785. ICE certified stocks fell 600 bags to 397,399 bags, a new 23-year low. Pending classification remain at 3,436 bags. No grading reported today.
Robusta Jan22 contract settled at $2034 -11 with a 2031/2059 range. A small test below previous day lows mirroring Arabicas activity as the dollar and the Brazilian Real offer a bit of support. Stock futures soared again this morning as early earnings reports ease concerns about the economy. Ironically, it’s that resiliency in the economy that suggests that systemic inflation will remain a problem for the foreseeable future, requiring more aggressive action from the Federal Reserve. Multiple Chinese airlines announced to resume of international flights and increased flight frequencies at an accelerated pace by the end of October, sparking wide speculation in domestic that a relaxing border policy for international travelers may come soon after the close of the 20th Congress on Sunday.
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Arabica coffee futures closed lower today pressured by speculators motivated by the collapse of the structure. The benchmark contract for December delivery closed 545 points lower at 196.70 cents a pound. Volume increased significantly reaching 64,005 contracts, boosted by 20,406 switches. The most active switch, December-March, reduced its premium to 3.70 cents, after having traded with a premium of 10.50 cents last Tuesday. More regular rains in Brazil and forecasts for similar conditions next week fueled the bearish sentiment. During the week, Arabica coffee prices fell by near 10%. The drop was mainly due to liquidations and aggressive selling by specs and funds. The breakout of the recent consolidation area and a weakness encouraged the sell-off, which found no support. This Monday the GCA US stocks data will shed some light on the flow of fresh coffee, after an increase in shipments from Brazil. In September 2021, stocks fell by 107,000 bags and the average change for the last five years is down 124,000 bags. The figures for Arabica exports from Brazil showed an increase of 18%, according to a CECAFE publication. Certified stocks fell by 7,980 bags to 400,439 bags. Pending grading remain at 3,436 bags. During the week, 16,280 bags were withdrawn from ICE.
In London, the Robusta contract for January delivery closed down $46 or 2.2% at $2,051 a ton. Price action was largely influenced by New York. Good activity from speculators when breaking each support level accelerated the decline. Worries about consumption in Europe with the fall in the purchasing power of the euro and to less than 13% year on year, and fears of recession and inflation, keep participants concerned. |
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