Arabica coffee futures for delivery September settled 145 points higher at 180.15 cents a pound. After three consecutive negative sessions the market consolidated on short covering. The long weekend encouraged the action. Despite weather agencies are not expecting any threat to the coffee trees, the cold front arriving this weekend to Brazil producing areas will keep in alert the participants. The New York market will be closed on Monday in observance of the Juneteenth Public Holiday. Volume reached 39,067 lots including 13,265 switches. The nearby switch gained 30 points to end at 4.25 cents. Brazil coffee exports fall 20.4 % to 2.1 million 60-kg bags in May compared to May 2022, reported CECAFE. The decline was attributed to harvest delays and low stocks. Total Arabica exports reached 1.99 million bags and Robusta 131,689 60-kg bags. The dollar weakened after the FED kept interest rates unchanged. Latin American currencies remained firm, Certified stocks declined 311 bags to 547,800 bags. Pending grading were unchanged at 10,887 bags. No grading was reported today.
In London, the Robusta September position settled $5 higher at $2694 a ton, trading between 2709/2673 range. Domestic prices in Vietnam continue firm. According with local sources, producers and dealers are retaining stocks aggravating the supply shortage. The NY-LDN arbitrage fell to $0.5710, the lowest level since Nov 2020.
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Arabica coffee futures for July delivery closed 280 points down at 182.75 cents a pound. Volume reached 55,983 lots, including 15,769 switches. Despite the pressure of the Index funds rolls, the switch ended unchanged at +405. Specs and funds selling was encouraged today by fundamental and technical factors. Prospects for large crops have dimmed the bullish sentiment. Last night the USDA’s Honduras attaché released the estimate for the 2022-23 crop at 7.2 million 60-kg bags and projected the 2023-24 crop at 7.9 million 60-kg bags. A small amount of coffee presented for grading yesterday, 4,620 bags, could indicate a change of the trend since March when stocks pending grading fell to 0. The technical selling was added after the market broke the lows of the previous session. With negative technical indicators, prices have now an objective down to 177.50 / 175.00. Certified stocks declined 2,243 bags to 548,111 bags. Pending grading added 6,267 bags to 10,887 bags.
Robusta Sep23 contract settled at $2689 +8 with a 2704/2671 range. The May US CPI came in at +4% which was broadly in line with market expectations, the knock-on impact on USD was if anything a touch bearish USD and bullish commodities. This helped Robusta stay firm, continuing to operate at the upper end of the recent range. Scale down roaster buying is certainly present in volumes we have not seen for some while. Spreads seem to be simmering with Jul/Sep hovering around monthly lows, 22/30 was the range today trading 5k lots. Nov23 2200 put traded 600x @ 31 |
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