Arabica coffee futures suffered heavy liquidation Wednesday that erased all the gains from the previous session. Long players were disappointed as the market was unable to exceed yesterday’s highs. With the recent estimates sustaining a smaller Brazil’s 2023 crop than prior expected, participants were anticipating a strong advance today. The most active contract for May delivery settled 625 points lower at 177.00 cents a pound. Volume declined to 55,311 lots, including 17,192 switches. Last minute origin selling ahead of the first notice for the March position on Friday added pressure on the prices. A double top pattern on the charts cautioned technical players that now are eyeing the performance of the market against the support area at 172, which must be respected. Cert stocks were down 25,165 bags to 844,914 bags. Pending grading remained at 0.
GCA US Stocks fell by 112,895 60-kg bags at the end of January to 6,264,956 60-kg bags, the lowest level in six months. . This is the largest draw since Oct 2021. Robusta MAY23 contract settled at $2049 -21 with a 2068/2042 range. Activity mirrored that of Arabica at a slightly lower pace trading inside previous day range. London market made the move to the downside on the early hours after the NY market corrected acknowledging the OI change. The volume has remained constant trading 17,558 lots including 5,975 switches.
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Arabica coffee futures continue to be boosted by short covering and spec buying encouraged by new estimate of the Brazil’s 2023 crop that confirms the size of the crop will be lower than previously expected. The switch H/K traded up to +0.70 as the OI on the MAR23 contract decreases by 6,381 lots on yesterday’s session, now at 17,035 lots. The commercial selling was moderately noted as it appears to be well fixed ahead of the FND. Participants ponder the StoneX estimate for the Brazil 2023-2024 crop at 62.3 m 60-kg bags. The most active contract MAY23 settle 650 points higher at 183.25 cents a pound. Cert stocks declined 3,025 bags to 870,079 bags. Pending grading remains at 0. The Dollar recover previous loses after the U.S CPI was published with U.S CPI (YOY) (JAN) ACTUAL: 6.4% VS 6.5% PREVIOUS; EST 6.2%. Crude oil traded lower on fears of higher interest rates. The Brazilian real declined to BRL 5.2151.
Robusta MAY23 contract settled at $2070 +26 with a 2076/2040 range. A rally towards the top of the range fuelled by a strong rally in Arabica. Robusta seemed sluggish in its rally up to test the rest highs (2082) some origin selling was seen but volumes overall were nothing to get excited about. Only 7.3k lots on the May contract traded, and 2.7k Mar/may trading between -5/0. Mar23 2050 put traded 1000x @ 9. |
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