Arabica Coffee futures closed 30 points higher on Wednesday at 134.65 cents per pound for the December delivery contract. The session began with upward movement, reaching yesterday’s high of 137.10 cents. Unable to surpass the level at first, the market headed south. Support from recovery in the Brazilian real, which gained 1.95% trading at BRL3.8172 at 4:00 pm EST, aided the market to retest the highs, this time breaking yesterday’s highs at 137.50. The Colombian peso closed at COP2926. Nevertheless, news of possible favorable showers in Brazilian coffee regions during November and December pushed the market lower at 133.80 towards the close. Yesterday’s liquidation was confirmed in the open interest figures, decreasing by 3,496 lots to a total of 181,065. Volume reached 32,950 including 7,403 switches.
Arabica coffee contract margins reduce to $2,850 per contract effective on October 15th, 2015.
London Market- More aggressive opening start in London today with a healthy combination of buying lifting levels above the initial phase of origin selling which has been an opening feature over the last few days. Ongoing discussions of when we might record more widespread rains in Brazil without confirmation just added to the strengthening sentiment of the market. Prices gravitated towards the overhead selling encouraged by the early push higher in the States. Arbitrage values lifted back to this week’s highs above the 62 area bases spot positions with momentum fully engaged on the upside again.
Now the Exchange is publishing the certified stock daily since the start of the month the working position has increased by just 135 lots. Despite ongoing reports of better nearby demand for Robusta we still don’t record movement from the exchanged based stock.
The net changes in the open position on a day today bases are not recording much movement partly due to the fact that rolling of positions makes up the main activity so far.
Nov/Jan narrowed trading into just $6 into the second part of the session with more aggressive rolling from the spec community out of the spot month the focus. The action throughout the day suggested that as the arbitrage breaks the range selling started to emerge into the action which provided additional buying into Robusta.