On the early hours the continuation of previous session pressure took Arabica to new lows near the lower Bollinger band of 156.70. Later in the morning, the U.S. non-farm payrolls came out at 223K, better than the expected at 203K but lower than previous month at 263K. The dollar index took it as a sell signal and instantly
erased most of yesterdays gains giving support to the coffee market which was only aided by the Brazilian real strengthening the last three sessions. The NY market was able to trade 200 points higher on the dollar index move but with no further momentum it retraced the steps back for the settlement. The most active contract Mar23 settle 225 points lower at 158.30 cents a pound. Arabica certs stocks increased by 9,732 bags to 830,272 bags. Pending grading: 206,704. Passed 9,732. Failed 7,905. With the Euro zone CPI and the US Job claims sending mix signals today traders await fresh fundamental news. Robusta MAR23 contract settled at $1825 -7 with a 1843/1804 range. A drift lower on low volume. Flat price drifted lower as NY experienced small spec selling. Commercial activity was very quiet on both the buy and sell side. Mar23 held a key support level at 1804 allowing for a small recovery into the closing bell. MAR/MAY remains in backwardation with a daily range of 24/31 on 1.2k lots. Sep23 1850/1650 fence (to the put) traded 600x @ -22.
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Arabica Coffee futures remain on the lower part of previous day range. The NY market although supported by a stronger Brazilian real and a bounce in crude oil of almost 2%, was unable to make any gains given that the U.S. labor market data gave the FED reassurance to maintain commitment of fighting inflation. Bearish sentiment was noted, traders are concern that rates may stay higher for longer than anticipated. Dollar index was 0.73% higher right up to the closing bell for Arabica. The most active contract Mar23 settle 75 points lower at 160.55 cents a pound. Volume was lighter with 33,734 lots including 9,390 switches. Arabica certs
stocks increased by 7,388 bags to 820,540 bags. Pending grading: 218,645. Passed 7,588. Failed 9,501. Robusta MAR23 contract settled at $1832 -41 with a 1875/1826 range. Low volume day with on 5k lots trading on the H3 contract. Origin selling was noted but much lighter than previous sessions. So really a mix of weak spec longs liquidating, and small origin sellers were the main drivers lower. Mar/May softened which was expected with how flat price traded. Range 28/36 on less than 1k lots. Mar23 1800/1650 put spread traded 250x @ 31. |
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