Arabica Futures Rally on General Markets Recovery
The New York “C” contract at the ICE for September delivery settled 590 points higher at 219.10 cents a pound. The market continues to be supported by ongoing concerns with the dry weather in Brazil as well as falling certified stocks. Larger producers in Brazil were also worried with low yields of the current harvest. Some attributed the lower yields to the development that has been slower than normal. The certs stocks decreased today 2,975 bags to 700,335 bags. Pending certification remained at 0 bags. The Brazilian Real was also firm today against the dollar, supporting today’s rally for coffee. All eyes were on the Fed interest rate decision due out later today. As anticipated, the central bank raised the rate by 75 basis points to a range between 2.25 % and 2.5 %. Brent Crude Oil jumped 2.4 % to $106.81/bbl, and Spot Gold Futures also firmed 0.18% to 1,720.37. Strong performance in Robusta today with SEP22 closing at $2009 +35 high 2015 / low 1969. Biggest driver was from the non-commercial buying / short covering, CTA’s seemed active above $1995. Commercial selling was noted scale up. Technically a decent close above the most recent high from the middle of the month, possible base for a rally up to 2031 next resistance level. Sep/nov remains firm with a range of -1/+4 on 1600 lots. The NOV/JAN 40/0 fence CSO traded 1000x @ 7 to the call, and the Nov22 2250 calls LU traded 600x @ 28.
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Coffee Extend Recovery
Ice Arabica coffee futures finished higher on quiet session Wednesday. The reference contract for September delivery settled 165 points higher at 218.15 cents a pound. Activity was dominated by short term specs playing both sides of the market. The Arabica market has been supported by tightening ICE inventories. Today the certified stocks decreased 8,605 bags to 718,617 bags, a 22-year low. Pending remains at 0. Also adding bullish sentiment is growing concerns about Brazil’s developing 2022-2023 coffee crop with dry weather forecasted to continue for most of the coffee belt in the coming days. Rains will need to pick up in the coming weeks in order for the crop to avoid any damage during the flowering period. Robusta held previous day high of 2000 at the opening and tested to the downside in the first few hours making the low at 1975. As the NY market came in Robusta began to test above the 20-day moving average today at 1992, successfully braking the last two sessions high and reaching a new high at 2007. Market was sluggish for the remaining of the session trading near the 20-day moving average and making a final stretch for the close to settle unchanged on the sep22 contract at 1998. Total volume was low 8,117 lots including 863 switches. |
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