Arabica coffee futures fell Friday in quiet trading. The most active contract for March delivery settled 35 points lower at 177.15 cents a pound. The “C” market booked a 3.9% or 7.90 cents weekly loss. Prices endured high volatility, trading in a wide range between 175/188. The possible forced liquidation of positions of Mercon, a large trading house, could have influenced the market’s action by encouraging short-term operators to trade ahead of likely scenarios. Once, the company filed for bankruptcy, calm returned to the market. The weather in Brazil remains of a concern. Despite some rains favored the south and central areas, the north continues dry. Certified stocks were unchanged today at 234,699 bags with 24,608 bags pending certification. In the past few days, coffee from Honduras and Tanzania has been adding to the pending grading. This is new coffee after the re-certification ban from ICE took effect earlier this month.
COT (CIT) Non-commercials increase long position by 1,514 lots to 44,265 lots long and decreased their short position by 1,518 lots to 27,783 lots short, with a net long position of 16,482 lots in the week to December 5th. A slow day observed through the Robusta terminal as the commercial sector absorbed news of a large U.S. trade house entering chapter 11 and what might be the wider implications for the physical coffee sector. However, key resistance at the upper Bollinger band averages resting today at $2613 basis Jan24 and the U.S. November Non- farm payroll coming in higher than expectation, saw the Robusta terminal operate through mild negativity with spot structure Jan/Mar also giving ground into the end of the week.
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Arabica coffee futures for March delivery settled 40 points lower at 172.70 cents a pound. Activity remained subdued with the volume reaching only 29,258 lots. Without fundamental news, the session was dominated by short term specs playing both sides of the market. The active nearby March / May switch remained firm ending at 280 supported by good buying interest. After staying in a well-defined range since the beginning of the year, – 145 and 0, the switch inverted rapidly during the last two weeks trading up to 340 yesterday, as the idea of a possible shortfall in the short term has been accompanied by the withdraw of the certified stocks. Since the beginning of November the cert stocks have declined 129,338 bags. The dollar firmed today adding some weight on the Latin American currencies. The real devaluated 0.5% affected by new rule increasing the capital requirement for banks. Cert stocks decreased by 33,764 bags to 259,800 bags. Pending grading added 1,535 bags to 28,090 bags.
Robusta Jan24 contract settled at $2523 -16 with a 2535/2495 range. A weaker day in Robusta largely dragged lower with Arabica giving up some of the gains from yesterday. Origin selling certainly backed off and did not seem to be chasing the market lower. Commercial buying was not seen. Most of the selling was coming from Speculative long liquidation. Structure weakened off again Jan/Mar saw a 50/60 range on nearly 7k lots. Robusta Jann24 2750 calls vs 2520Δ12 traded 1500x @ 14, Robusta CSO Jan24/Mar 90 put traded 1000x @ 47, Robusta CSO Jan24/Mar 90 call traded 1000x @ 10. |
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