Arabica coffee futures tested lower support in early trading but were able to recover ground once the Open Interest was published. An increase of 1,486 lots for a total of 187,067, confirming the new shorts were added during the previous session, triggering a short covering break that reached 163.90. However, gains were capped by a weak BRL that traded up to a 4-week high today at 4.95. The main contract Sep23 marked the high at 163.90 trickling down there after reducing the gains to a settlement 155 points higher at 160.45 cents a pound. Oversold conditions are noted and the cold front in the southern areas of Brazil currently presents no frost threat. Regardless, a probable slowdown of new short specs at these levels could show a short covering in the OI tomorrow. Moderated volume with a total of 43,944 lots traded including 12,016 switches. Arabica certified stocks increase 1,020 bags to 545,615 bags. Pending grading decreases by 2,615 total at 3,034 bags, 2,020 passed 1,969 failed.
Robusta Sep23 contract settled at $2509 -3 with a 2540/2499 range. Slow session considering the volatility seen in Arabica. The commercial sector was muted throughout the day with sporadic roaster buying seen in light volume, with most of the volume coming from speculative arb activity post 1 o’clock shuffle (buy NY sell LDN). Sep/Nov firmed $6 close to close pushing into new highs settling at +$104 which in itself is lending support to flat price. Robusta Coffee CSO - Sep23/Nov23 110 call traded 1000x @ 29 adding the fear that Sep/Nov will go the same was as Jul/Sep.
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Arabica coffee futures consolidate on a small range of 320 points. NY market had little activity prior to 4th of July holiday celebration, the main contract Sep23 settle 150 higher at 160.50 cent per pound. Volume was light with 31,219 lots traded including 7,970 switches. The switch traded on an even smaller range between +0.75/0.95 with a settlement at 0.80. OI on Jul23 contract is at 220 contracts as of Friday, no new delivery notices have been issued, total is at 654. Arabica certified stocks decrease by 320 bags now at 544,595 bags. Pending grading increases by 1,340 bags now at 5,329 bags
The Robusta market ends the session 2% higher as the recent non- commercial pressure eases whilst origin interest remains noted more by absence. Main drivers into the reversal were tapering downside trend strength encouraged the systematic shorts to reverse into a vacuum, which prompted the sep23/ nov23 to move to $105 premium on just over 2,000 lots. Technically, values held the previous sessions low and moved back above the lower Bollinger Band average. A secondary settlement above $2520 will likely trigger a further reversal with next resistance resting at $2678. |
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