Arabica coffee futures amplified the previous day’s range testing both sides as the Jul23 switch continues to be managed. OI on Jul23 stands at 12,558 as of yesterday, Arabica FND next week on the 22nd. On the technical side we close the week lower 535 points in a congestion range of the 8-, 20-, and 50-day moving averages, weather patterns in brasil have been monitored since the beginning of the week and US market news kept the broader commodity markets vigilant this week. Arabica Certified stocks declined 998 bags to 545,327 bags. Pending grading remain at 11,547 bags. No grading was reported today. COT(CIT) Non-commercials increased net long position by 1,087 lots to 16,051 lots net long. Monday 19th, US markets will be closed in observance of the Juneteenth Holiday.
The Robusta market observes only a marginal correction lower moving into the weekend, as participants focus on the remain july23 working exposure (29,022 lots) as first notice day nears. Structure remains firm as the roasting sector continue to fix against July23 drawing ongoing support into spot July23/Sep23 with values holding $40 premium and the wider market monitor issues in Vietnam. Technically values are running into resistance at the upper Bollinger band average whilst operating in overbought territory. However, the market would need to settle below $2671 basis Sep23 to change the dynamics of the recent upside, therefore long continue to operate amid comfort.
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Arabica coffee futures for September delivery closed 280 higher to 182.95 per pound. Good trading activity continued reaching 41,263 lots, including 13,551 switches. The short covering of the July position boosted prices. With the OI at 16,409, more support from the structure is possible before the July FND, June 22nd. Prices have shown firmness since the opening today, attracting speculative buying. Good support in the charts below 175, for the September position encourage the action. A cold front entering the producing areas of Brazil during the weekend will cause temperatures to drop significantly, however most weather analysts do not expect them to reach freezing levels. The long weekend and cold forecast prevented additional sales. The market will be closed on Monday due to the Juneteenth holiday. Arabica Certified stocks declined 1,475 bags to 546,325 bags. Pending grading added 660 bags today at 11,547 bags. No grading was reported today.
Robusta Sep23 contract settled at $2757 +63 with a 2770/2687 range. Main driver today was the rally in the Jul/Sep, we saw 5k lots trade between 32/70 (a high for the spread) eventually coming back to settle at +45, commercial shorts were forced to pay up into a vacuum of selling. The story remains the same, roaster buying is present with very little resting origin selling to absorb speculative buying. We also need to keep an eye on the OI in Robusta Jul23 coming into FND, currently we see 30.7k lots of open interest, on the high side with only 7 trading days left. Sep23 2800/2500 fence (to the call) vs 2713Δ64 traded 5000x @ 50, Jul23/Sep23 CSO 80 call traded 1850x @ between 7/10. |
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