Arabica coffee futures keep trading both sides of the recent range. Early trading had the markets stealth and slowly trading up to make a new high at 187.85 on the Jul23. later in the session the market trickle down before the US CPI was released were the dollar index started to recover early session losses putting some pressure in the “C” contract. The JUL23 contract found support at 185.00 for most of the session. The days range keeps getting smaller today 330 points wide and a settlement 55 points lower at 185.95 cents a pound on Jul23. The U.S CPI (YOY) (APR) actual: 4.9% VS 5.0% previous; EST 5.0%, U.S core CPI (YOY) (APR) actual: 5.5% VS 5.6% previous; EST 5.5%. Arabica certified stocks decrease 1,140 bags to 649,830 bags. Pending grading 0.
Robusta Jul23 contract settled at $2481 +16 with a 2487/2456 range. Flat price continues to probe the highs but unable to breakout. Origin is very much on the side-lines with the next layer of selling well above these levels it isn’t taking much on the buy side to keep prices at the upper end of the recent range. There is no strong fundamental story now in Robusta so for the moment the macro tailwind of a weaker US CPI inflation print is likely to have been a significant contributor to the activity we saw today. The switch Jul/Sep remains firm on light volume and a tight range 20/25 on 1.5k lots. The Jul/Sep CSO -25 put traded 1000x @ 1, Sep23 2400/2200 put spread vs 2443Δ24 traded 500x @ 73.
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Arabica coffee futures consolidate near key area of 184 with a smaller range then previous 2 sessions. The most active contract Jul23 settle 255 higher at 186.50 cents a pound. Recent volume has been moderated above 30K, today was not the exception a total of 32,733 lots were traded including 8,624 switches. Weakness on both the Colombian Peso and the Brazilian Real weighted on the “C” market. Temperatures around 6/9 Celsius continue to linger on the weather forecast for Brazil starting this weekend and into early next week. Participants will keep monitoring for any changes. Today's focus on the US debt ceiling talks combined with poor earnings forecasts to weigh on stocks this morning, with commodity prices following a similar pattern. Traders are also being cautious ahead of this week's anticipated inflation data. Arabica certified stocks decrease 4,186 bags to 650,970 bags. Pending grading 0.
The Robusta terminal continues to probe the upside as commercial pressure is noted by absence, whilst the fund community hold values above forward coverage pricing targets. This action sees levels straddled by the middle and higher Bollinger band averages, which has been the case since late March 2023 as the terminal maintains the firm up trend encouraged by heavy fund inflows across the sector. The structural premium down the curve does little to suggest we should expect a sustained reversal over the short term with most participants comfortable targeting fresh contract highs. |
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