Arabica coffee futures for July delivery settled 530 points lower at 182.70 cent a pound. Selling across the board was triggered as prices breaking from the recent consolidation. Commercial activity has been light. The switch Jul23/Sep23 settle at +2.05. Volume was back to moderate with a total of 46,167 lots including 13,184 switches. The Crude correction took a toll on the Brazilian Real and Colombian peso. Dollar index extends the climb; the GDP of the United States is updated (2nd update) to +1.3% for the first quarter of this year vs the previous estimate at 1.1% and market expectations also at 1.1%. US Jobless claims rose to 229K slightly up from an over two months low of 225K the week before but well below market expectations of 248K. Certified stocks declined 10,855 bags to 609,778 bags. Pending grading remains at 0.
Revised figures out of Germany showed Europe’s largest economy had fallen into recession prompting a risk off approach across the broader commodity sector, led by energy. Whilst Robusta was not immune from this weakness it tracked loses observed through the larger ‘C’ contract at a much slower pace, reflective in the arbitrage narrowing 1.5 cents to dip below 70 cents July23/July23. Most observers expect this trend to continue as industry focus on lower qualities which are being accepted by consumers through the high inflation environment. Technically the market continues to be straddled by the middle and upper Bollinger band averages, however stochastics has crossed lower in overbought territory whilst trend strength is easing. This will place the current long holder on high with key support resting between $2500 and $2480 basis July23.
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Arabica coffee futures closed higher while the Robusta reversed from 12-year high. The most active New York “C” contract for July delivery settled 60 points higher at 186.65 cents a pound. Activity remained light with the volume reaching 24,763 lots, including 6,429 switches. The action continued driven by short term specs stirred by the technical behavior. CONAB, the official food Brazilian agency, released the second survey of the 23-24 crop at 54.74 million 60-kg bag from 54.94 million bags had estimated in January. Arabica output is expected at 37.9 million bags, and Robusta at 16.8 million bags. The dollar firmed to fresh seven-week supported by optimism about the U.S. debt ceiling deal. The real of Brazil declined 0.6 % to BRL4.9654 and the Colombia peso 0.7 % to COP 4524.55. Certs stocks declined 4,454 bags to 629,810 bags. Pending grading remains at 0.
Robusta Jul23 contract settled at $2540 -42 with a 2588/2526 range. The main sponsor on the way up has been technical driven spec buying, today’s session saw that back off and as a result the market took a breather. Origin were light sellers early in the day but not chasing lower. Some commercial flat price and spread buying was noted. Jan24 2500 calls vs 2425Δ46 traded 500x @ 158, Jul23 2500/2400 put spread traded 500x @ 34. |
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