Arabica futures for July delivery settled 75 points lower at 186.05 cents a pound. Activity remained slow with volume reaching only 29,520 lots, including 8,067 switches. Spec selling put some pressure on prices at the beginning of the day, however lacking to attract solid the market recovered. Participants continued to be surprised by the GCA's decision to no longer publish monthly reports of green coffee inventories in the USA. Although the data was not entirely accurate, it was a good indicator of the flow of fresh coffee. The dollar firmed further reaching the highs of the last seven weeks. A solid US consumer spending and housing data boosted the greenback. Latin American currencies were mixed with the real trading weak at BRL 4.97 and the Colombian peso recovering below COP 4,500. Certs stocks declined 4,832 bags to 634,264 bags. Pending grading remains at 0.
Robusta Jul23 contract settled at $2582 +71 with a 2588/2504 range. Another choppy day which eventually ended with aggressive buying into the close. It’s clear the path of least resistance is higher, spec buying, and commercial short covering has been met with little resistance from any origin selling paving the way for higher prices. Jul/Sep traded into a contract high of +55 on 4.8k lots eventually settling at +48. Jul23 2250 put traded 2000x @ 7, Sep23 2800/2650 (2x1) call spread traded 1500x @ 10, Sep23 2450 puts vs 2515Δ40 traded 1500x @ 105, Jul23/Sep23 40 call traded 1000x @ 15
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Arabica coffee futures for July delivery settled 655 points higher at 189.40 cents a pound. A weak cold front arriving in the coffee-growing areas of southern Minas during the next three days, amid concerns about the Robusta crops, encouraged the fund and spec buying. The Robusta shortage easing any time soon looks low. Vietnam and Indonesia could be affected by El Nino, while Brazil could suffer drought in the Robusta areas. According with the last CFTC COT report released Friday, the non-commercials had reduced their positions the previous week, leaving them with enough power to add long positions again. In addition, lack of producers selling and no related option selling after the expiration of the June allowed prices to move up without resistance. Arabica certs declined 1,959 bags to 642,776 bags.
Robusta Jul23 contract settled at $2488 +56 with a 2506/2420 range. An impressive rally back to the recent highs posting a new high of 2506 base Jul23. With no real fresh news Robusta was certainly being dragged higher with the technical short covering rally in Arabica, and the new shorts that went in last Thursday was forced to cover. Little resistance in the way of origin selling today to absorb the buying. Spreads moved relatively in line with Jul/Sep only strengthening a touch vs settlement, 22/27 range on 1.6k lots. CSO - ICEU - Jul23/Sep 0 put traded 300x @ 5. |
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