Good morning all,
The Bloomberg commodities index headed lower for a fourth day in its longest run of losses since early December last year. This being said commodities king pin Oil edged higher for early prints. The US dollar is trading a touch softer from last night’s settlements against most major pairs.
Robusta furthered notions yesterday that an attack at the upper end of the recent range into the 1800 line could be on the cards, with the London market appearing to benefit from commercial led buyers and speculative interest courtesy of the Arbitrage sellers and specs who perhaps are of the thought process that the tranches of origination selling may be waning ahead of Vietnamese New Year celebrations (TET). Arabica should see some support into 122.50 basis the 2nd month as shorts extend, although a re-test of the 120 line cannot be ruled out, we would imagine buying into and around that area basis the extended short positioning would ultimately be supportive.
Despite an evident leaning on the Arb, prices remain sticky around 42 cents (Mar-Mar), and volumes continue to churn over at this price point. Basis the 2nd month however trend line support is penned into the 43 area basis current prices around 45 cents.
At time of writing, Robusta Mar18 is showing 1762 (unchanged) on the pre-open, and Arabica Mar18 is showing at 122.30 +0.45