The Arabica coffee futures market closed higher on Tuesday in a session dominated by spreads trading. The contract for March delivery ended 135 points higher at 177.05 cents per pound. Activity was driven by switches, with volume reaching 103,871 lots, including 38,682 switches. As the forward curve normalizes, it attracts the appetite of the participants. Commercial activity was not significant as short-term speculators were the main players on the day playing both sides of the market and looking for a break of the recent range between the 171.00 and 179.00 levels. The sentiment that the Brazilian crop will not be as large as previously expected continued to support prices as they traders again anticipate a possible global deficit. Our Brazilian team will publish their estimate for the 23-24 harvest on February 13. The currencies were mixed. Brazil's real was down 1.05% at BRL5.2050, after Lula interfered with economic comments on the interest rates. The Certified stocks increased by 14,525 bags to 887,378 bags. Pending grading were down 24,092 bags to 12,100 bags. Grading today 24,092 bags. Passed 14,625 bags. Failed 9,101 bags.
Robusta MAR23 contract settled at $2082 +44 with a 2084/2041 range. With market showing signs of support in yesterday’s session flat price found a base for a rally today. Seems most of this rally was H3 shorts rolling into K3. H/K traded 3.7k lots between 0/10. Origin was very quiet with sporadic small selling seen. May23 1750 puts vs 2055Δ6 traded 1000x @ 7, May23 2200/1900 strangle traded 1000x @ 68.
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Arabica coffee futures tested both sides of the range consolidating with a 290-point positive settle at 175.70 cents a pound. New shorts entered the market on Friday, we saw some covering today before OI with NY coffee prices up early testing short term resistance at 176 and later breaking the Nearby support at the 172 regions where buyers stepped in to consolidate the in between the 8 day and the 100-day moving average at 173.95 and 177 respectively. The markets in general seem to still be digesting the non-farm payrolls data and the dollar strengthening. Traders keep waiting for the COT with data delayed following the ransomware attack on ION Trading UK. No change in certified stocks today.
Robusta MAR23 contract settled at $2038 +7 with a 2045/2020 range. Quiet session with no notable commercial activity on either side. Flat price managed to hold intraday tech levels ($2035). Volumes hovered around the 8k level on May23 which is now considered the most liquid contract. Mar/May saw 4.5k lots trade between -3/+5. Mar23 2025 puts vs 2036Δ44 traded 2000x @ 29, CSO - ICEU - Jul23/Sep23 -80 calls vs 25Δ100 traded 1000x @ 107, Sep23/Nov23 40/80 call spread vs sell 0 put traded 1000x @ 2. |
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