Arabica coffee futures close slightly higher. The main contract Mar24 closed 15 points higher or +0.08% at $194.20 cents per pound. Short-term speculators mainly dominated the market. Yesterday's FED news has given support to the dollar and the commodities markets. Latin American currencies, on the other hand, have reacted downwards. Some bearish pressure both on fundamental and technical sides. Technically, March support remains at 190/188.5 and resistance at 198/200. Market participants have been talking about the possible arrival of certified stocks of a significant amount for some time. Operators are closely following the issue, as yesterday a significant amount arrived and this could be the beginning of a new wave of arrivals. In any case, the approval rate of about 50% reveals quality problems. Certified stocks today added 12,064 bags to a total of 261,893 bags. Pending certification decreased 17,057 bags to 70,579 total bags. A total of 22,311 bags were graded today: 12,160 bags passed and 10,151 bags failed.
The Robusta terminal posts a subdued season, as the recent speculative drive slows amid a backdrop of weakening spot structure. Whilst origin remains absent the nearby technical outlook would allow a retracement back towards $3162 with slow stochastics crossing down in overbought territory through declining trend strength. This coupled with expectations conillon will start to flow to the board mid to late March has encouraged a layer of arbitrage short covering today with March23/March23 strengthening to 45 cents. At the time of writing
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Arabica coffee futures recovered from early losses to close higher on volatile session. The most active contract for March delivery settled 75 points higher at 179.95 trading in 175.55 / 182.35 range. The market was under pressure early as the first estimate of the 2024-25 Brazil crop by a government agency came with a larger than expected figure. However, good support near the lows made participants to reverse positions. The 175 level offered good support at the beginning of December, from which prices were driven into an upward movement in which they reached above 200. At the same time, near oversold conditions discouraged further selling. The CONAB report pegging the 2024 Brazil’s output at 58.08 million 60-kg bags , 5,5 % higher than 2023 output, could have been interpreted as an early indication of better expectations for the crop. The low CONAB figure did not cause a major impact among operators who expect estimates from private entities with experience and deep knowledge of the producing areas of Brazil. Certified stocks decreased 3,530 bags to 263,810. Pending grading increased by 1,281 bags to 45,051. Graded today a total of 9,407: 5,760 bags passed and 3,647 bags fails.
Robusta Mar24 contract settled at $3063 -93 or 2.95% lower, with a 3056/3142 range. Flat price struggling to hold onto Tuesdays gains, new longs are seen liquidating into light commercial buying. Nearby structure has also weakened with Mar/may seeing a 164/190 range on 4k lots. Outright volumes are back to normal levels with 11k lots trading on the most liquid Mar24 contract. Robusta Mar24 3000/3150 callspread vs 3082Δ18 traded 1500x @ 70, Robusta May24 3200/3000 (2x1) callspread vs sell 2892Δ12 traded 1000x @ 23. |
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