Arabica coffee futures ended lower today, giving back early-session gains. The day began in a positive tone supported by the data of exports from Brazil that showed an increase of 22% year on year published last night by CECAFE. The contract with most of the action for December delivery closed with a drop of 55 points at 159.65 cents per pound. Activity continued to be high with a total of 81,177 lots traded including 30,955 switches. According to CECAFE figures, the increase in exports was mainly due to the Robusta variety, which totaled 505,153 60-kg bags or 245% higher than the 146,239 bags60-kg bags exported in July 2022. Arabica exports totaled 2.19 million 60-kg bags or 6.5 % higher than the 2.06 million 60-kg bags exported in July 2022. As we mentioned yesterday, Robusta exports mainly destined for Europe will help to replenish certified stocks now at 835,500 bags, a six-year low. Arabica certs down 5,048 bags to 520,869 bags. Pending grading 1,299 bags. NY Sep23 options expire tomorrow.
Robusta Nov23 contract settled at $2667 -12 with a 2576/2532 range. Another slow day with a rejection of the highs. Market continues to operate within the 2500/2700 range with light origin selling noted at the higher end of this range. Sep/Nov also remains within the recent range with 4.7k lots changing hands between 128/140. Robusta Sep23 3100 call traded 1000x @ 1 certainly a mark in the sand. Robusta Buy Nov23 2850 calls - Buy Jan24 2250 puts trades 1000x @ 91.
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Arabica coffee futures for December delivery settled 65 points lower at 160.20 cents a pound. Activity continued to be boosted by spreads trading. Volume reached 71,085 lots including 26,617 switches. Recent volatility has attracted a hefty participation from algorithms and automatic computerized systems driven mainly on the spreads. Data today from the Colombian Coffee Federation showed that while production was nearly flat in July year on year, exports were significantly lower, falling 17% from the same month last year. Lack of demand has pushed down differentials to + 18 from +80 traded a year ago. Dry weather has helped the harvest in Brazil that is now near to completion. Extended forecasts show some heavier rain will begin in the coming weeks, which should prove to be very beneficial for the early stages of development of the new crop. Certified stocks were down 2,025 bags to 525,917 bags. Pending grading stayed at 1,299 bags following Brazil’s sending yesterday to the Antwerp warehouse. This the first shipment of coffee to be graded since July 28.
In London Robusta coffee futures for November delivery settled $16 down at $ 2543 per ton. Commercial activity remained muted. The premium for September over November continued firm at $138 near the $170 record, reflecting the strong demand for the Robusta. The cert stocks that have dropped near 35 % since July as dealers withdraw them to meet industry demand. Brazil exported nearly 480,000 bags of Robusta in July and are expected to be deliver to the exchange. Vietnam’s coffee exports in July fell 22.6% from June to 108,872 tons. |
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