Arabica prices on the InterContinental Exchange lost ground Tuesday on a slow session. The most active contract for December delivery closed 35 points lower at 148.75 cents a pound. Volume was light with 25,485 lots traded including 5,875 switches. Some volatility was developed during the early hours. The weather in Brazil remained as the main factor attracting the participant’s attention. Some rains should help trigger the first widespread flowering of the new crop, which will help determine the condition of the crop and projections for yields. The forecast of a dry pattern after October 10-15 provoked some concerns amid farmers. The dollar was firm reaching its high level in ten months. Latin American currencies declined sharply as investors look for safe dollar denominated portfolios. The Brazilian real declined 1.1 % to BRL5.1600, and the Colombian peso lost 2.4% to USCOP 4,222. Arabica cert stocks increased by 2,926 bags to 444,871 bags. Pending grading 7,390 bags. A total of 3,901 bags were graded. Passed 2,926 bags, failed 975 bags.
Robusta coffee futures break lower on active session with slightly bigger volume then Arabica. The NOV23 contract settle -51 at 2410 with a 2461/2396 range, 10 points away from reaching a 14th session low at 2386 and 17 points away from the lower Bollinger band at 2379. A total of 27,417 lots traded including 8,689 switches. Good activity on the Nov23/ Jan 24 switch was noted as FND is approaching on October 26. The structure has been losing premium after trading with premium of above 150 three weeks ago. The recent rolls and the proximity of the Vietnam crop added pressure.
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Arabica futures settled higher Monday supported by news and technical factors. The most active contract for December delivery closed 295 points higher at $149.10 cents a pound. A new rule announced by the InterContinental Exchange on Friday that bans the re-submission for grading of coffee previously certified caused second thoughts amid participants. This is seen as supportive for the coffee as the repetition of this procedure in the past made the stocks lose credibility regarding the quality. The change of the forecast for Brazil main coffee producing areas added support to the prices. Rains were forecasted for the next days, however according with late models a dry weather pattern appears to develop after Oct 10 for 4 to 5 days. In the technical outlook, support against the January lows and oversold conditions are attracting buying from speculators. Short covering also helped the market today after more short players increased positions during last week. Friday COT revealed that the fund’s short position was 16,000 as of last Tuesday, but probably grew larger as open interest increased 9,000 since then. Certified stocks are unchanged at 441,945 bags. Pending grading 10,011 bags.
Robusta Nov23 contract settled at $2461 -1 with a 2489/2454 range. The market is really lacking any kind of fresh fundamental story to trigger a breakout of the recent range. Recent sessions are extremely quiet with very little commercial activity or really any meaningful activity of any kind. No notable option trades. |
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