Arabica coffee futures continued under pressure as beneficial weather in Brazil improves the expectations for the next 2024-2025 crop. The benchmark coffee contract for December delivery on the ICE exchange settled 185 points or 1.15 % lower at 159.10 cents a pound. Volume reached 46,195 lots including 13,843 switches. The Dec/ Mar switch firmed today as certified stocks continue to fall. With the December’s FND around the corner it will be hard for fresh coffee to arrive on time, which could keep the switch inverted. Weather reports show that total rain accumulation for October has exceeded the normal for this month. On the technical front, the breaking of last week support level triggered stop selling orders and speculative selling. Commodity markets declined driven by the Brent crude oil that lost 3.0 % at $87.82 per barrel. The soft complex fell with the cocoa down 0.31% to $3860 a ton, and the sugar 2.3% to 26.75 cents a pound. Certified stocks were down 4,040 bags to 390,135 bags. Pending grading 0.
Wednesday, the FOMC will announce its monetary-policy decision. Market is expecting the FED will leave fed-funds rate unchanged at 5.25 % to 5.50%. The Robusta terminal opened immediately under heavy pressure as participants responded to a negative COT release and speculation we will see a heavy Conillon export figure against October. Values opened at $2370 basis Jan23 and swiftly fell to trigger a layer of stops through the nearby averages resting today at $2347. With consistent origin selling visible overhead and commercial buyers noted by total absence, values feel back to $2322 where it held into the closing bell as the speculative community preferred playing from the short side. Technically the market is showing plenty of potential to the downside, which stochastics pointing lower just below over bought territory with the next key support resting at $2223.
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The Arabica coffee market at the New York ICE Exchange ended slightly higher on Monday at the end of a sluggish session. The contract with most of the activity for December delivery closed up 60 points or 0.45% higher at 165.85 cents a pound. Despite ending with gains, the direction of the market was not clearly defined, reflecting a bit of uncertainty on the part of participants. Although the market briefly reached the previous week's high, the short covering that has been supported the 20.00 cents recent rally may be coming to an end as the most recent COT report showed a significant reduction of the fund’s net short position. Open interest fell by 6,002 lots in Friday's session and accumulated a drop of more than 18,000 lots since Oct 13. Besides the market remains with over bought values. In terms of fundamentals, the market remains focus on the developing crop in Brazil now that the first flowering has occurred. Arábica cert stocks declined by 4,128 bags to 417,296 bags. Pending grading 0. No grading reported today.
Robusta Jan24 contract settled at $2526 +47 with a 2568/2446 range. Another high volume day with 22k lots trading on the most liquid Jan24 contract. Flat price eventually broke through the August high of 2505. Structure also continued higher, with Nov/Jan seeing a 98/122 range on 6.2k lots, this certainly would have added further fuel to the flat price rally. Origin selling was light into this rally. Robusta Jan24 2500/2350 fence (to the call) vs 2496Δ78 traded 1500x @ 59, Robusta Jan24 2400/2300 putspread vs 2480Δ15 traded 1000x @ 32, Robusta Jan24 2100 put traded 750x @ 6 |
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