Arabica coffee futures for December delivery settled 105 points lower at 146.25 cents a pound. The contract lost 5.3 % during September. The selling today was caused by the weather forecast for Brazil. In addition, specs joined after prices easily broke up the recent support level. The proximity to the support levels posted early in January at 144.85 discouraged short players. Weather analysts are predicting rains covering the main producing areas of Brazil for the next couple of weeks that will relieve the dryness. Dry and hot weather boosted the market last week that reached a two-month high. During the Swiss Forum and Gala Dinner, the outlook was bearish due to the Brazilian crop which is expected to put downward pressure on prices, the industry's stocks which remain high, and weak demand exacerbated by a generally bearish macroeconomic environment. There have been some premature indications that the 2024 crop could be similar or higher to the previous crop, although no accurate assessments can be made until at least the first widespread flowering occurs. The certified stocks decreased by 2,128 bags to 441,945. Pending grading 10,011 bags.
Robusta Nov23 contract settled at $2462 -7 with a 2480/2446 range. Another extremely quiet session. The market is really lacking any kind of fresh fundamental story to trigger a breakout of the recent range. We are just chopping across moving averages with light roaster buying. Structure remains unchanged Nov/Jan saw a 92/103 range on 3k lots. Robusta Jan24 2500 calls vs 2360Δ32 trades 500x @ 55.
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Arabica futures for December delivery closed 160 points lower at 149.25 cents a pound affected among other things by the firm dollar. Volume reached 39,150 lots including 9,366 switches. Activity was boosted by book squaring ahead of the end of the quarter and fiscal year. The active nearby Dec/Mar switch attracted good speculative participation as some operators anticipate a possible increase in the discount as the Sep/ Dec did. Latin American currencies, Brazil’s Real and Colombia’s Peso declined adding selling on the coffee markets. The real fell to a 3 ½ month low exciding the BRL 5.06 and the Colombian peso tumbled to COP 4,100. On coffee technical factors, the breaking of the recent lows attracted spec selling, however good support below 147 level and near oversold conditions prevented further losses. At the same time dry weather for Brazil’s coffee belt, remains as the main bullish factor in the near term. Extended forecasts due show rains should pick up in the next couple of weeks, but crop conditions cannot be accurately assessed until the first widespread flowering occurs. Certs stocks were unchanged at 446,518 bags. Pending grading at 13,871 bags.
Robusta Nov23 contract settled at $2447 -9 with a 2460/2426 range. Robusta continues its sideways movement with very little conviction pushing it in either direction. Some commercial buying has been seen throughout the day as the market tested recent lows around 2430. As can been seen by the low daily volume no participant has a specific axe to grind. Nov/Jan continues to chop around +100. Robusta Mar24 2000/Jan24 2200 diagonal put spread trades 3000x @ -17. |
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