Arabica coffee futures closed higher Friday as bullish fundamentals continue to support the market. The most active contract for May delivery settled 550 points higher at 185.75 cents a pound. Activity was moderate reflecting the long weekend. The US market will be closed on Monday.
The forward curve added backwardation in the front months reflecting a possible supply tightness in the short term. A total of 62 delivery notices were issued last night against the March position. The technical strength complemented the bullish outlook. The breaking of a key resistance level at 182 places the target at 192 on the charts. The dollar strengthened to a six-week high as traders anticipate that the FED will increase the rates higher than previously anticipated to continue fighting the high inflation. Latin American currencies recovered supported by gains in Mexico and Brazil stock markets. The certs stocks declined 8,374 bags to 832,230. Since last Friday, the certs have decreased by 42,424 bags. The COT report will be published next Friday, February 24. The CFTC will begin with the COT report that was originally scheduled to be published on Friday, February 3, and will release sequentially the missed reports. Robusta MAY23 contract settled at $2098 +26 with a 2104/2057 range. Both markets managed to breakout of the recent range resistance mainly by speculative buying and little origin selling to absorb. The 2100 level on Robusta is a key psychological area and may provide some short-term resistance. Flat price volumes certainly picked up with 11k lots trading on the May23 contract and just under 5k lots of Mar/May trading ahead of FND next week. May23 1950/1850 put spread traded 1000x @ 17
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The Arabica coffee futures market recovered partially losses from the previous session on Thursday, lifted by spec short covering as recent selloffs found no follow-through. The most active contract for May delivery closed 325 points higher at 180.25 cents a pound. The volume reached 37,873 lots, including 11,564 switches.
The nearby structure, March-May, was very volatile, trading within a wide range between -20 to +225. Industry buying ahead of the first notice day boosted prices, which found little resistance amid weak origin selling. The market seemed to be disconnected from LATAM currencies. The Colombian peso fell near to COP 5,000 due to uncertainty about the proposed government reforms. Brazil's real came under pressure finishing with little changed. Certified Arabica stocks fell 4,310 bags to 840,604 bags. Pending grading remains at 0. Robusta MAY23 contract settled at $2072 +23 with a 2077/2049 range. Market seems to have found equilibrium with flat price happy to oscillate between 2020/2080. With commercial activity light and origin happy to sell rallies, volumes aren’t anything to get excited about, only 6k lots of May23 trading. Mar/May traded 1.9k lots between -5/1. May23 1750 put traded500x @ 5. |
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