Arabica coffee futures for September delivery recovered from recent lows to close 180 points higher at 166.95 cents a pound. Price action was dominated by short-term players guided by the technical behavior, being forced to cover shorts at the end of the session by noticing support against 162 level. The climate of Brazil continued favorable for the harvest that progress is estimated at 40%. A cold front approaching the producing regions will drop the temperatures, without threatening the coffee plantations since they will be well above freezing levels. The dollar loosened a bit supporting commodity. Brent crude lost 2.7% to close at $72.50 a barrel as concerns persisted over global economic growth and weak demand from China. A total of 520 coffee delivery notices have been presented as of Monday for the July position. Certified stocks rose by 2,602 bags to 549,252. Pending grading dropped 3,260 to 3,989 bags. A total 2,870 bags of Brazilian origin passed classification today. 650 bags failed.
With only 98 lots of tenders registered on the first notice day and a 6,526-lot reduction in the July23 open interest, leaving 8,609 lots of working exposure the Robusta terminal re engaged the upside. This once again was driven by structure with July23/Sep23 moving out to $218 premium up $28 and Sep23/Nov23 $97 premium, whilst origin followed the same trend of no response. However, flat prices gain failed to encourage a fresh element of buying which saw upside trend strength diminish prompting systematic flow to reverse from long to short forcing Sep23 to end the session only marginally higher.
0 Comments
Arabica coffee futures attempted to the upside at the open with a 1,000 lots traded in the first 20 minutes boosting the most active September contract to the high for the session at 167.00. NY market only trickle down there after finding support in the 162 area. Most of the action was found between 164.50 and 165.50 were the market settle with a minimum change of 30 points higher at 165.15 cents a pound. Volume was moderated with 40,000 lots traded including 10,335 switches. Weather remained favorable in Brazil for both harvesting and early development of the new crop. A weak cold front will enter in southern coffee areas of Brazil next weekend; however, the temperatures are expected to be above freezing. A total 502 delivery notices were posted for the July contract on Friday. Arabica certs were unchanged at 546,650 bags. Pending grading increased by 1,374 bags to 7,249 bags. No grading reported today.
An explosive session observed through the Robusta terminal as July23 management in front of FND drives extreme gains in structure. Participants entered the session with all eyes on the heavy working exposure still resting in the July23 contract, which enters notice period tomorrow. Spot management started immediately but amid at a slow pace, with flat price Sep23 finding technical support at nearby averages ($2668) as origin remained side-lined, whilst the roaster undercurrent is still in place. However, this slow pace changed following the open interest release showing overnight exposure in July23 still stood at 15,135 lots, which saw spot structure rally aggressively setting the tone for the remainder of the session with July23/Sep23 ending at $190 premium. After today’s activity we could assume half of the overnight exposure has been neutralised with participants now awaiting tender reports tomorrow. |
|