Arabica coffee futures closed higher Thursday at the end of a session with moderate volume. The most active contract for May delivery settled 260 points higher at 184.35 cents a pound. Main action came today from short term traders looking for volatility and operators closing books for the end of the months. The nearby K/N switch saw firm gains. On the other hand, some pressure came from weakness of the Brazilian Real, which traded near month lows today. Fundamentally, the market is digesting the results of a Reuters poll which estimates Brazil’s 2024-2025 harvest at 69.5 million bags. Earlier this month, StoneX forecasted Brazil’s 2024 crop at 67 million bags. Data from CECAFE on Brazil’s February exports will be released next week. During the month, Arabica futures prices declined 6.45 cents or 3.38%. A firm dollar, the increase of cert stocks and the expectative of a greater Brazilian output in 2024 were the main bearish factors affecting the market. Next week, market participants will gather in Nashville for the NCA conference.
Cert stocks increased by 10,840 bags to a total of 353,606 bags. Pending grading also increased by 504 bags to 149,251 bags. Grading summary today: total 19,985 bags, 11,390 passed and 8,595 failed. The cert stocks increased 103,777 bags during to month, reaching 353,606 bags, the high level since November 2023. Robusta May24 contract settled at $3095 +51 or 1.68% higher with a 3110/3035 range. Continued technical support gave participants confidence to buy back into the market re-establishing nearby longs. Commercial activity remains muted with very little significant activity on either side of the fence. Volumes reflect this fact with only 7.8k lots traded on the May24 contract. Structure also strengthened; May/Jul saw a 59/71 range on 2k lots. Robusta Jul24 2750/2450 putspread vs 3010Δ16 traded 1000x @ 61.
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Arabica futures closed down again today at the end of a slow session. The reference contract for delivery in May ended 130 points down or 0.7% at 181.75 cents per pound. Volume reached 24,836 lots, including 5,679 switches. The active switch May/July remained unchanged, with a premium of 140 points. The action was similar to recent sessions, with short-term speculators trading looking for volatility. The bearish sentiment was added by the arrival of 40,146 bags yesterday, mainly of coffee from Brazil to be certified, however the approval rate has only been around 50%. The firmness of the US dollar also affected the commodity complex in general. The Brazilian real lost 0.7% against the dollar after rising almost 1% in the previous session. US inflation data at the end of the week has boosted the US currency. Certified stocks increased by 8,995 bags to 342,766. Pending grading decreased 17,280 bags to 148,747 bags. Graded today a total of 20,800 bags (BR 20,160, IND 640): 9,280 passed (BR 8,960, IN 320), 11,520 failed (BR 11,200, IN 320).
Robusta May24 contract settled at $3044 -33 with a 3070/3022 range. Flat price continues to whip across key technical levels with no clear direction. Main factors causing this are lack of fresh fundamental news and a lack of interest from the commercial sector. The main participants are specs (liquidating near term longs) and algorithms day trading momentum. This is reflected in poor volumes, only 8k lots traded on the most active May24 contract. Structure has softened off a touch today with May/Jul seeing a 58/69 range on 1k lots. Robusta CSO May24/Jul 100/50 putspread traded 2000x @ 32, Robusta Jul24 2900/2600 putspread vs 2985Δ22 traded 2000x @ 101, Robusta May24 3050 puts vs 3052Δ48 traded 2000x @ 130. |
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