Arabica coffee futures had a slower pace with a noticeable lower volume. A total of 31,740 lots were traded, including 6,591 switches. The front contract Dec23 settled 275 points lower at $158.20 cents a pound. The NY market returned to recent range lows this week, almost returning half of the gains made this month. The markets awaited the US FED interest rate decision. No change was expected. A rate hike would have been a shock to the market. The leading downside factor today was the absence of buyers in the later hours as crude extended lower accompanied by the weakness of the Brazil real and the Colombian peso. Participants will remain vigilant of the action around the 154 area as the dry weather forecast in Brazil provides support. Arabica ICE certs stocks decreased 7,260 bags to 440,853 total bags. Pending grading decreased from 4,004 bags, now to 12,831 bags. A total of 8,555 bags were graded today; 6,945 passed and 1,610 failed.
Robusta Nov23 contract settled at $2508 -32 with a 2554/2499 range. Market continues to drift lower dragged primarily by the Arabica market. Robusta is struggling for any fresh fundamental news and continues to operate in the longer-term range of 2400/2600. Commercial activity is extremely low. The Nov/Jan spread is facing large intraday moves, 88/117 range on 3,375 lots, low liquidity is the main reason we are seeing such large intraday moves. Robusta Nov23/Jan24 150/50 fence (to the call) trades 1250x @ -5.
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Arabica coffee futures had an active session. Good volume was noted with a total of 50,355 lots including 9,883 switches. Momentum to the upside was observed from the start and activity kept building in the early hours. After trading above the previous day's highs, interest was shown and the NY market added 340 points to a new high at 164.50 on the front contract of Dec23, levels not seen in over a month. The dollar and crude have been major drivers lately. The dollar consolidated while crude took center stage with an obvious retrace later in the session after striking a 15-month high. Arabica followed this trend, retracing before settlement. The Dec23 contract settled 135 points higher at 160.95 cents per pound, but 355 points away from the session high. From the technical view, this could be the start of a lateral action in the 154/166 range. In the fundamentals, the market will keep a close look at dry weather in Brazil and the continuation of Brazil’s pending grading in the certified stocks. Arabica ICE certs stocks remain at 448,113 total bags. Pending grading is 16,835 bags.
In London, Robusta did not share the same excitement as it was unable to hold its previous highs, it was reported yesterday that the Ivory coast coffee exports were down 17% year on year. Today’s session was still active, volume was moderate with a total of 23,833 including 5,762 switches. The front contract on Nov23 at 2540. On the technical side, Robusta is back below the higher Bollinger band today at 2565. Traders await further news about the quality of this season's crop from Brazil. |
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