Arabica coffee futures settled with gains Wednesday at the end of a session dominated by spreads trading. The contract with most of the activity for May delivery closed 275 points higher at 187.85 cents a pound. Volume reached 94,870 lots including 35,586 switches. The volume alone of the Mar/May switch was over 27,000 reflecting a sizable participation as it traded between 2.80 to 3.40 cents. As usual computerized systems and algo traders are attracted to the volatility ahead of the first notice day. A significant open interest of the March 190 straddle added some inertia to the market. Other soft commodities were up today, March cocoa rose 3.9% to $5,423 per ton, after posting a record high at $5,429. Sugar rose on concerns of dry weather in Brazil settling 1.8% higher at 23.99 cents. Certified stocks were unchanged at 288,745 bags. Pending grading added 11,520 bags (BR) to 55,014 bags.
Robusta Mar24 contract settled at $3220 +22, with a rage 3197/3245. A constant flow of roaster fixations against March24, with heavy volume still to follow encouraged values in London to hold throughout the session as origin remains noted by absence. This supportive buying has effectively neutralized weakness observed through the start of the month with values holding nearby averages prompting short-term systematic shorts to reverse. However, the flat price gains are having no effect on spot structure as March24/May24 continue to slide with values touching $101 premium today as the recent long trims bets as the threat of conillon mobilisation weighs on minds.
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Arabica futures close lower again today as speculative selling was encouraged by technical weakness. The most active contract for May delivery settled 160 points lower at 185.10 cents a pound. Volume reached 63,454 lots including 19,998 switches. The nearby Mar/May switch attracted good size participation, typical as the market approaches March first notice day, February 21st. The backwardation remained until July but tended to gain a little contango after. Technically, the breaching of previous week’s lows triggered spec selling as the market appears moving towards new support level. At the same price are returning to the low band of the Bollinger band study, that has a 180 objective. Open interest increased by 2,250 as of yesterday, reaching 235,750 contracts, evidencing the new shorts in the market. Certified stocks increased by 7,290 bags to 288,745 bags. Pending grading declined 9,265 bags to 43,494 bags. Graded today: 14,935. Passed 7,920 (BR2,615; NI 4,675). Failed 7,645 (BR 7,095; NI 550).
Robusta futures are higher today, recovering from the previous session’s losses. The May position ended + $28 at $3,095 per ton. Vietnam will begin celebrating the Tet holiday on Thursday when activity will remain muted for the week. Activity from Brazil is expected to be limited when the country celebrates Carnival from February 9 to the 14th. |
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