Arabica coffee futures test lower after yesterday’s new shorts activity. The most active contract Mar23 settle 500 points lower at 161.30 cents a pound. Volume was moderate with 43,500 lots including 10,590 switches. Crude oil losses had significant pressure on the commodities market in general as well as the LATAM currencies. China is recovering from the worst Covid infection wave after the shift to “living with the Covid-19 virus” last month. Traders are eyeing China’s recovery and expecting it to be a leading constructive factor in global growth later this year, the lingering property crisis, and underlying problems of more outstanding debt
issues of the Chinese local government should not be overlooked. Arabica certs stocks decreased by 1,516 bags to 813,152 bags. Pending grading: 226,195. Grading: 16,538 Passed 4,079. Failed 12,459. Robusta MAR23 contract settled at $1873 +21 with a 1880/1855 range. The thick layer of origin selling which we have seen over the last few weeks seemed to have back off allowing for some spec buying across key technical levels. The close today puts us back in the middle of the recent range. Volumes were steady with 11.7k lots trading on the MAR23. Mar/May remains strong settling at +33 on 1.7k lots. Mar23 1800 puts vs 1878Δ30 traded 2000x @ 30.
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Arabica coffee futures started the year under pressure. NY market absorb a good part of today’s volume at the 20-day moving average area of 166.45. The Brazilian real and the Dollar weighted on Arabica in the early hours tracing the low for the day at 164.65 Mar23 contract. The market awaits fresh fundamental news, but support is fueled by La Nina weather event on mayor producing areas and the demand gradually increasing as China intents to manage covid infections under updated restrictions. The most active contract Mar23 settle 120 points lower at 166.10 cents a pound. Volume was moderate with 39,442 lots traded including 10,597 switches. German inflation at the consumer level was 9.6% year-on-year in December, coming in below analyst expectations of 10.7% and the second month in a row for a decline in the inflation rate That could leave the Federal Reserve as the more hawkish central bank, raising risks for a stronger dollar and weaker U.S. economy, in the eyes of Wall Street traders. Arabica certs stocks decreased by 18 bags to 814,668 bags. Pending grading: 242,768. No grading today.
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