Arabica coffee futures extended rally as concerns for a shortage in the near term fueled the bullish sentiment. Also congestion in Brazilian ports could aggravate delays. The most active contract for December delivery settled 280 points higher at 173.70. Volume reached 60,548 lots including 16,484 switches. The nearby Dec/ Mar switch firmed trading at 2.20 cents as rolls continued to add support. Technical factors contributed with the move as the market was able to exceed the resistance area above 170-172. Colombian markets were closed in holiday today. Certified stocks decreased 12,454 bags to 347,555 bags, a 24-year low. Pending grading remained at 0.
Robusta Jan24 contract settled at $2422 +50 with a 2425/2360 range. Strong rally through key technical levels uncovering short term stops and encouraging continued speculative buying through recent highs. This buying was met with moderate resistance from scale up origin selling but by no mean aggressive. The bullish macroeconomic backdrop certainly supported the rally in Robusta today, couple that with the strength in the structure these factors combined was main trigger for the flat price rally. Volumes continue to remain on the low side with on 7.7k lots trading on the most liquid contract. Robusta Jan24 2325/2225 putspread traded 750x @ 30, Robusta Jan24 2350/2250 (1x2) putspread traded 600x @ 3
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Arabica coffee futures closed higher today supported by the certified stocks data and the strengthened of the structure. The most active contract for December delivery settled 555 points or 3.5% higher at 165.35 cents a pound. The certified inventories have been falling significantly recently, reaching the lowest levels since April 1999. Today, an additional drawdown of 11,933 bags was reported, bringing down the total to 368,100 bags. The pace of recovery of these stockpiles could be slow as a new regulation will go into effect on December 1st, which bans the re-certification of coffee, leaving the door open only for fresh coffee to be certified. The Dec/March switch gained 80 point premium to end at +180 after trading in an ample range between +100 and +245. The switch could continue firm until the FND of the December position on November 21st. Open interest decreased by 4,125 lots, evidencing yesterday’s hefty liquidation.
Following dovish comments out of the FED overnight the commodity sector moved to risk on status. This triggered a wave of speculative buying off the Robusta opening bell with values opening $3 higher and swiftly attacking resistance at nearby averages resting today at $2349 on route to the intraday high at $2364. The gains held into the mid-session but with the markets failure to breach the previous high coupled with overhead origin pressure, early buyers liquidated dragging values $40 off the highs. Same story the commercial long and short are millions of miles apart, leaving the systematic momentum followers to dominate flow which naturally generates huge intraday ranges as commercial flow is not available to absorb moves. |
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