Arabica coffee futures retreated from morning highs with a positive settlement of 180 points higher at 180.30 cents a pound. Arabicas New Longs yesterday saw some follow through this morning to take the active May 23 contract to a high of 182.85, above technical resistance of 181.15. Equities opened higher following through on overnight strength, as traders gained confidence in steps taken to save Credit Suisse from insolvency. That then allowed money to flow back into the broader commodity sector overnight, as well as easing fears on Wall Street. The focus of the world is still on the Federal Reserve’s policy decision tomorrow. Volume and liquidity are low in mostly all markets, adding to the volatility. Most commercial participants in commodities are still going about their business, but larger speculative players are absent. The NY market had a total volume of 25,286 lots, including 6,041 switches. Certified stocks decrease by 288 bags to 775,785 bags, while stocks pending grading remain at 1,135 bags. No grading today.
COT (CIT) Non-commercials increase net short position by 1,988 to 2,527 net shorts in week to March 14. The Robusta terminal continues to drive higher, testing key resistance at the 20-day moving average of $2136, basis May23 contract. Marginal changes in the open interest (101,377 lots plus 458) indicate recent gains have been generated via the short-term non-commercial sector. This dynamic would have remained the same today as origin pressure grinds to a halt, leaving the path of least resistance higher, with most expecting the long side of the recent arbitrage to be used potentially to stop coffee, which naturally draws a layer of support into the near structure. Technically speaking, upside momentum strengthens as oscillators reverse higher, which suggests further upside potential. However, given that this move has been generated via the momentum-following element of our business, we will need to see a settlement above $2136 tomorrow in order to keep this momentum intact.
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Arabica coffee futures May 23 contract settled 190 points higher at 178.50 cents a pound. After a slow start of the session the early pressure dissipated keeping the market in the consolidation range of the last two weeks, The NY market showed an increase of activity and strength into the close making new highs before the closing bell. The volume continues to be low, trading a total of 26,299 lots, including 6,364 switches. In general, markets had a slow start and were mostly mixed following this weekend’s developments. UBS agreed to purchase Credit Suisse for $3.23 billion, marking the end of a 167-year run for the institution. All the attention now turns to the Federal Reserve this week and their interest rate decision. Sentiment is mixed on whether the Fed will continue at its current pace or modify its monetary policy stance to accommodate markets. Certified stocks decrease by 11,302 bags to 776,073 bags, while stocks pending grading remain at 1,135 bags. No grading today.
The London terminal reverses heavy intraday losses to end the session over $20 higher, as the $ index failed to attract a safe-haven play in response to the UBS/Credit Suisse deal. Heavy speculative pressure off the opening bell responding to broader macro negativity saw values gap $18 lower to swiftly reach the intraday low of $2023 on May 23. However, the early weakness started to slow as larger players bypassed the coffee sector to focus on other markets, and with an undercurrent of commercial buying in place, downside momentum stalled, forcing a short-covering rally. This prompted an impulsive move higher as values moved back above the previous key support resting around $2060, with the path of least resistance clearly higher as commercial selling was noted by its absence until we reached $2080. Amid a backdrop of firming structure and thin origin, pressure values held gains into the closing bell. |
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