Arabica coffee futures climbed 3.1% Tuesday amid Brazil weather concerns. The most active contract for December delivery closed 705 points higher at 228.25 cents a pound, after hitting a seven-week high of 228.60. The commercial and spec buying boosted the market since early on the session. Despite it is too early on the season, the dry period during the second half of August added to the already drier-than normal conditions raised concerns amid producers that now foresee a ten-day period of high temperatures and no rains for Parana, Sao Paulo and Minas Gerais. A stronger Brazilian currency added support to the market, discouraging local sales. The real finished at BRL 5.1029, up 560 points against the dollar. The greenback fell as economic data showed the US home sales fell in July and private sector activity contracted. The certified stocks increased by 25,917 bags to 653,667 bags. Pending grading: 184,539 down 27,517. Grading today: 30,717 bags, passed 25,917, failed 4,800. Only one delivery notice was issued last night against the September position for the FND.
Robusta NOV22 contract settled at $2258 +15 with a 2260/2236 range. Fairly subdued day considering Arabica broke recent highs printing +7 cents on the day. Volumes remained low with no real commercial activity to note, we seem to be poised for a test of the high 2270 base X22. Option market was busy, in particular the CSO marker, 6000x NOV22/JAN22 0 puts traded today at $4, 2000x JAN23/MAR23 40/0 FENCE traded at $11. Nothing else to note today.
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Arabica coffee futures rose today helped by fresh funds and specs buying. The most active contract for December delivery closed 785 points higher at 221.20 cents a pound. The activity was mostly dominated by switches. The volume reached 48,804 lots, including 13,989 switches. The nearby switch, September- December, traded within a wide range of 2.20 cents, losing 1.25 cents at +1.35 cents. The already reduced purchases of the industry and covering of short spreads have been reflected in the loss of the premium of this spread. A constructive technical formation encouraged buying by speculators who now anticipate the market entering a period of little origin sales until the start of the next harvest. The exceeding of last week's highs added the bullish sentiment. Certified stocks increased by 17,070 bags to 627,750 bags. The pending grading decreased by 16,430 bags to 212,056 bags. Grading today at the Antwerp terminal: 20,270 bags. Passed 17,070 bags . Failed 3,200 bags .
In London, the Robusta market for November delivery settled $17 higher or 0.8% at $2,243 a ton. The action did not follow the New York action as less speculative participation was noted. Arbitrage buying kept Robusta prices under pressure. The Arabica premium has been declined from $1.40 to $1.12 recently, attracting good buying interest. The market remained inside the same range of the last 1-1/2 week, without any clear technical signal. The dollar strengthened on risk aversion pushing the euro back below parity. The dollar index ended at 108.95, the high level since 2002. |
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