Arabica coffee futures recovered on Monday helped by a bullish sentiment of the commodity complex and firm currencies. The most active contract for July delivery settled 280 points higher at 183.10 cents a pound. Without fundamental news, and technical indicators with neutral values, short players opted to cover positions after Friday’s COT data revealed funds reduced substantially the long position. Coffee futures have been following a down trend since mid-April on perspective of a larger than previously estimated Brazilin crop. Concerns of slowing consumption has added the bearish sentiment. The commodity complex reacted today after Saudi Arabia cuts oil output by 1 million barrels a day after meeting with OPEC allies among worries over decreased demand. Commodities have fallen 11% so far this year as participants are anticipating a slowdown of the world economy. Latin American currencies rebounded today supported for higher crude oil prices. The real strengthened 0.6% to BRL 4.9600 helped by better economic Q1 data as well. Arabica certified inventories dropped 8,424 bags to 565,084. Pending grading 0. July options will expire Friday June 9.
Robusta Jul23 contract settled at $2608 +33 with a 2611/2550 range. Intraday volatility remains high but eventually flat price bounced off the bottom end of the recent range supported mainly by a rally in Brent Oil and strength in Arabica. Origin selling was limited therefore the speculative buying was met with little resistance. Jul/Sep continues to trade within the recent range, 5.5k lots traded between 30/35. Jul23/Sep23 20 put CSO traded 500x @ 10.
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Arabica coffee futures closed slightly lower on Tuesday at the end of a session dominated by switch trading. The contract for July delivery closed 50 points lower at 182.60 cents a pound. The volume reached 47,654 lots, including 15,878 switches. The most active switch, July-Sept, traded in a range between 280 and 350. Short players have been rolling positions ahead of the first notice day June 22nd. Friday July options will expire. Over 5,000 lots of Calendar spread option ( CSO ) above the 350 strike will expire, leaving shorts without coverage. Latin American currencies raised today. The Colombian peso climbed to a ten-month high as the political scandal could disrupt the leftist government reforms. ICE certified inventories dropped 7,780 bags to 557,304. Pending grading 0.
Robusta Jul23 contract settled at $2614 +7 with a 2637/2591 range. Robusta flat price tested the upper end of the recent range with light origin selling seen scale up. With little fundament news and technical indicators showing no strong signals it’s a rangebound market. The strength in the structure will attract specs to sit with a long position as it ‘’pays’’ to be long. Jul/Sep also continues to trade within the recent range, 9k lots traded between 31/37. Sep23 2700/2350 fence (to the call) vs 2590Δ59 traded 3000x @ 47. |
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