The New York “C” contract for September delivery closed 260 points or 1.5% lower at 161.35 cents a pound Tuesday. Activity continued to be lifted by spreads trading. Volume reached 68,563 lots including 23,573 switches. Commodities were mostly lower today as the US dollar rose against major currencies. Cocoa December fell 3.2% to $3,385 per ton after trading at $3,618 the highest level since 2011. US trade deficit narrowed to a three-month low of $65.5 billion in June 2023 from a downwardly revised $68.3 billion in May. Data from China raised concern about global demand. China shipments dropped 14.5% in dollar terms last month from a year earlier, while imports contracted 12.4%. ICE certified stocks remained unchanged at 527,942 bags. Pending grading at 1,299 bags.
Robusta Nov23 contract settled at $2559 +5 with a 2562/2532 range. Slow grind higher, posting a new 6 week high of $2562 (Nov23). General theme of the day was spec Arb selling (sell KC buy Robusta). We saw sporadic but light selling coming from origin around the highs with commercial buying seeming chasing it higher. Sep23/Nov23 continues to trade within the recent range, 4.9k lots go through between 125/135 eventually settling $1 stronger at 129. Robusta Sep23 2775/2900 call spread vs 2688Δ18 trades 2000x @ 18, Robusta Sep23/Nov23 50 put traded 500x @ 1.
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Arabica coffee futures for September delivery settled 260 points higher at 163.95 cents a pound. Short covering supported the raise. With more than 13,000 shorts held by money managers as revealed by the last CFTC’s data, funds and specs have been very active covering the position. Today’s action was boosted by spreads trading as well. The volume reached 75,463 lots, including 26,978 switches. High volatility of the nearby September- December switch attracted algorithm and computerize trading systems. A total of 18,000 switches traded in a 20/85 range. Commercial activity was light. The real of Brazil fell against the dollar as worries about an easing of the monetary policy will continue after last week’s cut of the interest rate. Colombia was on holiday. Arabica certs remained unchanged at 527,942 bags. Pending grading 0.
Robusta Sep23 contract settled at $2682 +70 with a 2686/2615 range. Positive day dragged higher by the rally in KC mixed with technical buying above the 40ma. Today was the first day the bulk of the OI has now flipped to the Nov23 contract, this is always a big trigger for funds to roll positions as the Sep23 is now ‘’less liquid’’. We saw 8.3K Sep/Nov spreads trade between 121/139 as funds rolled that long position forward. Robusta Sep23 3100/2150 strangle trades 2300x @ 2, Robusta Nov23 2300/Sep23 2600 diagonal put spread vs sell Sep23 2625Δ40 buy Nov23 2502Δ22 trades 1300x @ 1. |
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