The Arabica coffee futures market for delivery in March closed with gains of 265 points or 1.5% at a rate of 173.20 cents per pound on Monday. Dry weather over the weekend and forecasts of similar conditions for the remainder of the week encouraged short buying and covering by speculators. At the same time, the strengthening of the December – March switch added support to the market. The switch gained 2.00 cents premium to finish at 5.95 cents. With the open interest of the first position showing more than 30,000 lots, and the First Notice Day (Nov 21) just around the corner, the shorts have been surprised when the expected drop has not materialized. A continue withdraw of the cert stocks has complemented the bullish scenario so far adding the possibility of a squeeze for the December. So far this month, the cert stocks have decreased by 86,843 bags. Today the certs were unchanged, however, a total of 4,400 bags (Brazil’s) were showed for grading today. COT (CIT) Non-commercials decreased long position by 413 lots to 30,517 lots long and decreased their short position by 3,914 lots to 24,689 lots short, with a net long position of 5,828 lots in the week of November 7th.
Robusta Jan24 contract settled at $2503 +82 with a 2507/2393 range. Flat price started the day tracking NY lower on very light volumes and some short-term spec shorts coming into the market. This quickly turned around as the US came online and these weak shorts covered into a liquidity vacuum. Commercial selling was seen but in very light volumes scale up mostly on the Mar24 contract. Structure rallied in line with the flat price move, Jan/Mar saw a 45/68 range on 3.8k lots closing near the highs at +67. Robusta Jan24 2600/2750 callspread vs 2488Δ18 traded 1,500x @ 31
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Arabica coffee futures picked up where they left off yesterday. The main contract, Mar24, extended higher to a high of 174.45 near the high of June 21st, a session in which the market breached lower after almost 3 months of holding above 171.00. The NY market Mar23 contract settle 210 points higher at 174.20 cents a pound, trading a total of 84,345 lots including 27,605 switches. The Dec/Mar switch took off from early trading above the previous session high with a daily range of +3.15/+4.90 and a settlement of +4.60 on 16,444 lots. The Dec23 OI seems to be getting more traction, reflecting that yesterday's activity had a drop of 9,195 lots, now at 49,292. Arabica certified stocks decreased 8,266 bags are now at 302,235 bags. No pending grading.
Robusta Jan24 contract settled at $2430 with a 2447/2408 range. Market was largely being dragged higher with the rally in Arabica. Very little origin selling seen allowing us to print a new recent high, putting us back into the middle of the recent 2300/2600 range. Volume reflects the lack of commercial interest with only 8k lots trading on the most liquid outright contract. Structure remains relatively unchanged with Jan/Mar seeing a 42/54 range on just less than 2k lots. No notable option trades. |
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