The Arabica coffee market suffered a abruptly fall on Thursday as heavy selloff spread in the commodity markets. Energy prices continue to decline as investor are concerned with the demand deterioration in case the economies enter in a deep recession. Global equities were trading lower, and the dollar continue to strengthen. The FED will have to consider a big interest rate hike in late July. The most active coffee contract for September lost 1205 points to settled at 195.30 cents a pound. Volume reached 60,441 contracts, including 17,158 switches. The drop accelerates as prices went through the 200.00 key support level, triggering technical selling. Commercial activity remained light. Certs stocks declined 8,993 bags to 750,702 bags.
Pending grading: 0. Sea of red in commodities as the dollar continues to rally, Robusta was no exception. After breaking the recent low of $1937 this uncovered small stops which caused the market to post a new low of $1924, levels not seen since August 2021. Settlement on SEP22 was $1930 -51, modest in comparison to other sessions but only 9.7k lots changed hands on the most active contract. SEP22/NOV22 settled at -5 having traded 3.7k lots. Options were extremely quiet with only a few tiny clips trading. With Arabica closing below the big psychological level of 200.00 this will certainly kick the specs into sell mode which in turn will drag Robusta lower
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The New Yok coffee “C” closed higher today supported by speculative short covering after the market bounced from previous session’s lows. The most active contract for September delivery settled 210 points higher at
154.05 cents a pound. Volume declined to 42,012 lots, reflecting less spreads activity ahead of the FND tomorrow. Coffee prices have been under pressure during the recent sessions falling more than 11 % from the highs Short players participation has been attracted because of the heavy spec liquidation and origin selling. Technical factors and the respect of the support levels discouraged additional selling today, and at the same time triggering the short covering. The diminished commercial selling helped the market. Dollar weakness added lending support to the commodities with the dollar index losing 0.4%. The Brazil’s real gained 1.3 % before the dollar, trading at BRL5.0170. The Robusta market posts a resilient performance once again holding support resting at nearby averages just below the phycological $1600 marker basis Sep21. The market has now formed a solid baseline at $1592 as values have failed to attract sustained selling at the lower end of the recent range, with both origin and spec pressure unwilling to track weakness. This has allowed primary focus to shift back toward July21 management as first notice day approaches with the overnight exposure 17,879 lots nearing the current certified stock levels standing overnight at 15,276, with the market waiting to see if a financing roll is registered via EFP over coming days indicating unchanged certified ownership. |
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