Arabica coffee futures extended the plunge Wednesday as heavy liquidation and speculative selling flowed in the market. The most active contract for March delivery settled 700 points lower at 143.90 cents a pound. A weak technical picture contributed to attract the speculative participation. A favorable weather in Brazil has supported the expectative for the 2023 production. A private estimate published today by Bloomberg expects Brazil’s coffee output my rise this year to 65m from 56m a year earlier, boosted by improved weather conditions. The volume reached 83,435 contracts including 23,423 switches. Certified stocks increased 7,630 bags to 850,401 bags. Those pending certification are at 170,024 bags. Grading today: 18,031 bags 7,630 passed and 10,401 failed. Market will close Monday January 16 on observance of Martin Luther King Jr. Day.
Robusta MAR23 contract settled at $1811 -29 with a 1855/1788 range. A drift lower on moderate volume. Robusta mirrored lower as NY experienced further fund selling. Commercial activity was noted on the buy side. Mar23 held a key support level at 1787 allowing for a small recovery into the closing bell. MAR/MAY remains in backwardation with a daily range of 26/32.
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Arabica coffee futures for March delivery closed 25 points lower at 158.05 cents a pound. The market was supported early by spec short covering as prices respected previous week’s lows. Activity recovery with the volume reaching 50,919 lots, including 13,052 switches. A weaker real and lack of solid buying reversed the action. Brazil’s currency fell on Monday after supporters of former president stormed the country’s Congress, the presidential palace and the Supreme Court in the capital, Brasilia, yesterday. The real declined 1.1% to BRL5.2600Certified stocks increased by 6,386 bags to 836,658 bags. Pending declined 10,512 bags to 196,192 bags. Grading today 16,157 bags. Passed 7,537. Failed 8,620. Technically, prices are in oversold terrain and vulnerable for a corrective up move.
The Robusta terminal drives over 2% higher as the recent pre-Tet pressure eases whilst the speculative community responded to Macro positivity. Premarket sentiment favored the upside as participants focused on the broad re opening in China and USD weakness. This saw speculative buying engulf the opening bell prompting values to challenge the previous high at $1843 basis March23, before moving into a consolidatory phase below the short-term moving average. However, with a second wave of speculative buying and a layer of arbitrage related buying values reengaged the upside triggering stops through resistance $1860 on route to the intraday high at $1874 amid a lack of notable origin pressure. This buying slowed into the later stages prompted a marginal retracement into the closing bell. |
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