Arabica coffee futures fell today in another volatile session. The contract with most of the activity for May delivery settled 310 points or 1.62% lower at 188.05 cents a pound. Volume declined to 58,278 lots, including 18,599 switches. The rolls of positions continued to dominate the activity. The active March/May switch gained 50 points to end at 4.95 cents, however it traded up to 5.30 cents during the day reflecting the aggressive rolling of positions. Market talks about a possible stopping of a large number of lots during the March delivery period will keep short players away from the marketplace. With only four days before the First Notice Day for the March contract they will continue to boost the premium. The Arabica market will be closed on Monday, February 19th in observance of the Presidents Day Holiday. Open interest fell 7,082 as of yesterday, evidencing the liquidation . Most of the liquidation however was in the March24 contact with open interest down 7,801 lots to 28,589. Brazil continues to be quiet as the country celebrates Carnival. Weather forecasts show Minas Gerais, the country’s main Arabica producing region, should receive rain and thunderstorms consistently throughout next week. Externally, the US dollar firmed on new inflation data, which is also adding some pressure to the market today. Certified stocks decreased 25 bags to 297,445 total bags. Pending grading increased by 18,405 bags to 57,259 bags. No grading done today.
Robusta May24 contract settled at $3163 -29 with a 3210/3157 range. A slow session largely dominated by small speculative selling off the back of USD strength. Very little commercial activity was noted other than sporadic scale down roaster buying. Volumes backed off with only 9k lots trading on the most active May24 contract. Nearby structured softened a touch, Mar/May saw a 115/135 range on 3.8k lots still operating within the recent range (low 101). CSO’s were very active today with the highlights being: Robusta CSO Mar24/May24 75 put traded 2500x @ 4, Robusta CSO May24/Jul24 150 call traded 1000x @ 15. Robusta CSO Mar24/May24 120 put traded 500x @ 17.
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Arabica coffee futures soared Friday helped by industry and speculative buying. The most active contract for May delivery settled 565 points or 3.04% higher at 191.50 cents a pound. The Robusta market continued to support the New York market as it posted new historical highs today. Strong gains of the active March/May switch in New York added support to the prices. The possible squeeze ahead of the FND boosted the March / May premium to 5.50 cents. At the same time the selling pressure eased as the rolls of the funds could be coming to an end. During the week, Arabica prices gained 1.32% or 2.50 cents. The activity was dominated by spreads trading. Certified Stocks increased by 8,243 bags to a total of 297,795 bags. Pending grading decreased by 6,825 bags to 30,534 bags. Graded today a total of 13,225 bags: 9,065 passed and 4,160 failed.
COT (CIT) Non-commercials increased their long position by 636 lots to 56,425 lots long and decreased their short position by 194 lots to 21,485 lots short, with a net long position of 34,940 lots in the week to February 9th. A technically dynamic end to the week on the Robusta terminal with values ending 3.5% higher. This remains a feature of poor physical spot availability derived from issues through Asia and a continue drive from roasters chasing the board higher to cover march23 fixation, with more to come before first notice day (26th Feb). With origin naturally absent the path of least resistance has been higher with the investment community happy to drive huge capital inflows into the broader soft commodity sector with long term strategies in mind. Technically, Slow stochastics have started to cross up in oversold territory with values posting an impulsive move away from nearby support at the 20 day moving average which expresses further potential to the upside. The market will look for confirmation in the form of a secondary settlement above the recent high at $3220 basis May23. |
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