Arabica coffee futures settled lower Friday but recovering partially from early heavy losses. The market was under pressure on spec selling that extended from last night following the announcement of an increase of initial margins in London. In addition, reports of rains in the Dahlak region of Vietnam added weight on the Robusta prices. The most active “C” contract for July delivery at the ICE exchange in New York ended 4.10 cents or 1.78 % lower at 224.00 cents a pound. Volume reached 37.014 lots including 10,350 switches. Dollar strengthened today after US inflation data for March reinforced perception the Federal Reserve will delay interest rate cuts. During the week, Arabica lost 3.38% or 7.85 cents. Profit taking and technical driven selling contributed to the down move at the same time as the recent commercial buying eased. The volatility declined after the FND on Monday. Cert stocks were down 4,835 bags to 656,657 bags. Pending grading added 5,230 bags to 56,204 bags. No grading on Friday.
COT (CIT) Non-commercials decreased their long position by 3,666 lots to 69,040lots long and decreased their short position by 938 lots to 18,335 lots short, with a net long position of 50,705 lots in the week to April 23rd. The London terminal finally gives some ground ending the session over 3% lower as the recent roaster fixations and hedge lifting slows. The contract for July delivery closed at $4151 -153, trading in a range of 4132/4303. Without these buying elements upside momentum stalled and encouraged the systematic players to shift from long to short, which drove values into a vacuum triggering stop below the previous low. Whilst most participants would not turn bearish after a one-day event, the nearby technical outlook would favour a retest of the old congestion area resting marginally above $4000 basis July24.
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Arabica coffee futures closed with strong gains Wednesday. The firm Robusta market remains as a major factor adding the bullish sentiment. Commercial buying ahead of the first notice day for the May position was significant today. With only two days left commercial price fixing has boosted the market. The contract with the most activity for July delivery ended with gains of 1,120 points or 4.9 % at 240.35 cents a pound. The volume reached 74,220 lots including 22,957 switches. The technical strength attracted speculators and funds buying too as they perceive a situation that could be parallel to that of the cocoa market, which has risen more than 150% this year. In the technical part, previous patterns on the charts, suggest the next objective against the 243/245 area, highs of Sep 2022, and later against 250/260. The market seems to continue disconnected from macro factors such as the weakness of the Brazilian real and the Colombian peso. Certified stocks rose 7,375 bags to 630,856 bags. Those pending certification increased by 1,035 bags for a total of 57,848.
Robusta Jul24 contract settled at $4195 +218 with a 4206/3952 range. A new absolute high basis 2nd month, taking out the previous $4,140 high in Sep 1994 (5 MT contract). We are currently facing a financial squeeze on the commercial sector with runaway flat price and a stagnant physical market. This leaves participants unable to get hold of product, and what is available is extremely expensive. Rumours of a very large commercial player buying in the physical space today caused prices to rally (in very large quantities). Shorts continue to cover with the total absence of a natural seller meaning we just trade through vacuums of liquidity. Volumes reached nearly 43k lots total. Robusta Jul24 5000 call traded 1000x @ 65, Robusta Jul24 3800 puts vs 4094Δ30 traded 1250x @ 130. The Arabica coffee market closed higher today after a highly volatile session. The most active contract for July delivery closed 640 points or 2.9% higher at 226.85 cents a pound. Once again, the strength of Robusta prices drove the rise of the New York “C” marking. In an extension of Friday's action, prices were under selling pressure after the open. Contributing to the bearish sentiment, the COT data released on Friday also influenced the early trading as traders felt that the funds could be overloaded with long positions. The funds' long position has reached record levels of 68,839 lots as last Tuesday as reported by the CFTC in its weekly COT report. The strength of other soft complex raw materials added support. Cocoa remains firm trading above $11,000 per ton. Certified stocks fell by 15,105 bags to 624,545 bags. Pending certification rose by 1,675 bags to 66,079 bags. Today a total of 5,415 bags were graded. 5,130 bags (BR 855, NI 4,275) were approved, while 285 (NI) failed
Robusta Jul24 contract settled at $3949 with a 3975/3805 range. Market was dragged lower in the early part of the session largely down to the selloff in KC which seemed to be a COT reaction if anything. However, as the day progressed, we continued higher with a lot of the early shorts covering push prices higher. Once the US came online, we pushed through the highs and normal service resumed with limited commercial selling absorbing the speculative and roaster buying. Volumes were high with over 16k lots trading on July alone. Structure weakened with May/Jul trading 13/52 range of circa 6k lots. Robusta Jul24 3800/3600 putspread vs 3930Δ12 traded 1100x @ 79, Robusta May24 3500 put traded 1000x @ 1, Robusta CSO May24/Jul24 50 call traded 1000x @ 6 Arabica coffee futures closed slightly lower after making new highs not seen since Q3 2022. The contract with the most activity for May delivery closed 140 points lower at 211.10 cents per pound, reverting from early high of 216.40 cents. High volatility continued to affect prices. Short-term speculator buying boosted the market early, however profit-taking later knocked prices down. The selling was encouraged by technical factors such as overbought conditions that make the market very vulnerable to a correction, and the proximity to important resistance levels against the 220 area. The CFTC’s COT data published on Friday showed once again that funds continue to add long positions, now with a net long of 43,059 lots, while the short commercial position expanded by 12,540 lots to a net short of 98,353 lots. Certified stocks added 2,100 bags to 615,652 bags. Pending grading increased by 770 bags to 73,884 bags. Total graded today 4,990 bags.
Robusta May24 contract settled at $3742 with a 3793/3701 range. Early in the session flat price struggled to gain traction, under pressure from the weakening structure. May/Jul continued lower printing a new recent low of 51 eventually rally back to unchanged to print a high of 77 on 7k lots. Commercial activity was sporadic with a small amount of commercial buying seen scale down. It seemed the rally into the close was more short covering from earlier shorts going into the market rather than fresh longs or commercial pressure. Robusta May24 3750/3300 putspread vs 3776Δ44 traded 250x @ 82. Arabica coffee futures closed slightly lower after making new highs not seen since Q3 2022. The contract with the most activity for May delivery closed 140 points lower at 211.10 cents per pound, reverting from early high of 216.40 cents. High volatility continued to affect prices. Short-term speculator buying boosted the market early, however profit-taking later knocked prices down. The selling was encouraged by technical factors such as overbought conditions that make the market very vulnerable to a correction, and the proximity to important resistance levels against the 220 area. The CFTC’s COT data published on Friday showed once again that funds continue to add long positions, now with a net long of 43,059 lots, while the short commercial position expanded by 12,540 lots to a net short of 98,353 lots. Certified stocks added 2,100 bags to 615,652 bags. Pending grading increased by 770 bags to 73,884 bags. Total graded today 4,990 bags.
Robusta May24 contract settled at $3742 with a 3793/3701 range. Early in the session flat price struggled to gain traction, under pressure from the weakening structure. May/Jul continued lower printing a new recent low of 51 eventually rally back to unchanged to print a high of 77 on 7k lots. Commercial activity was sporadic with a small amount of commercial buying seen scale down. It seemed the rally into the close was more short covering from earlier shorts going into the market rather than fresh longs or commercial pressure. Robusta May24 3750/3300 putspread vs 3776Δ44 traded 250x @ 82. Arabica futures settled higher for third consecutive session supported by commercial short covering. The firmness of the London market also continues to boost Arabica prices. The most active contract for May delivery closed 585 points higher at 203.60 cents a pound. Volume expanded to 108,026 lots, including 35,950 switches. The rise has surprised dealers that have been forced to cover positions. Non-commercials have been adding long positions as trade and the industry have been very bearish for Arabica, with many reports released in recent days highlighting a negative point of view. It is also important to remember that the majority of industry forecasts are seeing a surplus of Arabica coffee for the current coffee year. There has also been research and data that shows that the once strong biennial crop in Brazil is lessening, and production is stabilizing from year to year, indicating that even in an “off-year,” Brazil’s crop could remain very high should it be spared any weather damage.
Technically, breaking of the 200-level triggered good buying. However, overbought conditions made the market vulnerable for a correction. The open interest increased 5,154 lots as of yesterday to 247,741 lots, evidencing the new long positions. Cert stocks increased by 12,603 bags to 616,682 bags. Pending grading added 5,237 bags to 73,888 bags. A total of 21,713 bags were graded. 12,603 passed (2,673 BR, 1,925 GU, 275 ME, 4,410 NI, 2,250 PE, 320 TZ, 750 VE), and 9,110 failed ( 1,100 GU, 1,100 ME, 4,950 PE, 960 TZ, 1,100 VE). Robusta May24 contract settled at $3812 +149 with a 3838/3634 range. Another strong rally with further commercial hedge lifting being the main driver of prices higher. A real lack of meaningful selling was present to absorb the buying. Structure remains stubborn with no real movement, May/Jul saw a 81/88 range on 10k lots. Outright volumes were the highest we have seen for months with 19k lots trading on May24 alone. Another busy day in the option space with the highlights being: Robusta Jul24 2800 put traded 2800x @ 11, Robusta Jul24 3500/3250 putspread vs 3660Δ16 traded1 1500x @ 84, Robusta Jul24 3400 calls vs 3678Δ72 traded 1000x @ 376, Robusta Jul24 3500/4000 callspread vs sell 3100 put traded 700x @ 200. Arabica coffee futures on the ICE exchange settled higher today on speculative buying. The most active contract for May delivery gained 295 points or 1.56% to end at 191.80 cent a pound. With the London market closed, which has provided support recently, traders' action was encouraged by technical performance. Good support against the lows of the previous two sessions, triggered the spec buying. The open interest reached 240,465 lots the highest since March 2023. An increase of 22,465 lots since march 19th evidences the new longs that have been added during the last two weeks accompanying the rise . The weather in Brazil continue favorable for the northern producing areas with moderate rains, but dryness is expected to the south. The dollar firmed today adding pressure over the Latin America currencies. Arabica cert stocks were unchanged today. Pending grading added 6,415 bags to 80,296 bags. No grading reported today.
In a relatively slow day due to the upcoming holidays, Arabica coffee futures consolidated within the range of the last two weeks with the majority of the activity generated by short-term speculators. The reference contract for delivery in May closed 80 points higher at 185.65 cents per pound. The volume reached only 48,646 lots including 17,247 switches. The nearby switch remained weak as the structure tended to normalize. The forward curve shows slightly backwardation until the September position and then appears almost flat and with little contango. The COT report published by the CFTC on Friday revealed that the funds liquidated long positions, adding at the same time shorts to a net long of 28,469 lots. Certified stocks increased by 8,926 bags to 577,023 bags. Pending grading decreased 7,128 bags to 80,529. Grading summary on Monday: 20,401 total bags graded, 8,926 bags passed (6,451 BR, 1,375 MX, 1,100 PE) and 11,475 bags failed (3,690 BR, 1,440 PNG, 6,345 PE). During last week, the certs added 79,419 bags. Pending decreased 66,973, an indication that the flow of fresh coffee is in decreasing.
Robusta May24 contract settled at $3417 +59 with a 3415/3352 range. Strong recover from after Friday’s sell off. No clear reason for the rally other than a bounce of Fridays low. The key difference today was the layer of selling from origin, volumes not seen for a while. Outright volumes were very low only 5,877 lots traded on the May24 contract. May/Jul continues to operate within the recent range 87/96 range today on 1.5k lots. Robusta Jul24 3000 puts vs 3280Δ24 traded 1000x @ 75, Robusta May24 3200 puts vs 3380Δ23 traded 1100x @ 40. Arabica coffee futures closed lower on speculative selling as long players preferred to take profits after strong resistance against the previous session's highs halted an early rally. The most active contract for May delivery finished 85 points or 0.4% lower at 184.85 cents per pound. With no fundamental news, the action was largely steered by the technical price action. The dollar firmed today adding pressure on the commodities complex. Brazil's real ended weak at BRL 4.9958 near recent lows, encouraging selling in the local market. The attention of traders will be focused on the development of the Brazilian harvest, which begins in a couple of weeks. During the week, Arabica futures ended with a gain of 195 points. Certified stocks continued to increase, especially due to arrivals from Brazil and Honduras. Certified stocks increased 7,470 bags to 568,097 total bags. Pending grading decreased 14,425 bags to 87,657. Grading report on Friday: 17,825 total, 8,725 bags passed (3,085 BR, 1,650 GT, 855 NI, 3,135 PE) and 9,100 bags failed (6,545 BR, 275 GT, 2,280 PE). COT (CIT) Non-commercials decreased their long position by 3,680 lots to 50,569 lots long and increased their short position by 1,880 lots to 22,100 lots short, with a net long position of 28,469 lots in the week to March 19.
Robusta May24 contract settled at $3358 -27 or -0.80% with a 3428/3355 range. A mixed session completing a 3rd consecutive day of higher highs and higher lows. However flat price was unable to hang on to any of the gains made during the day being sold off in the latter part of the session. Commercial activity was light on the buy side but for the first time in a while origin selling was present scale up. Structure continues to operate within the recent range, stubbornly strong even with a recent increases in certified stock. May/Jul saw a 90/100 range on 1,828 lots. Robusta May24 3500 calls vs 3370Δ34 trades 1250x @ 65, Robusta Nov24 2500/2200 putspread trades 1000x @ 34. Arabica coffee futures for May delivery settled 310 points or 1.7 % higher at 185.50 cents a pound. Despite the market’s action continued to be driven by short term specs, short covering caused an early raise. As revealed by the open interest, some short positions added yesterday could be pressed to cover today as prices moved up. Fundamentals remain muted with the focus on the Brazil 2024-25 crop with the harvesting to begin in a couple of weeks. Activity will tend to slow next week as most of the countries will have the Easter break. The ICE coffee market will be closed next Friday March 29th in observance of Good Friday. In macro factors, yesterday’s FED meeting exposed positive path for the economy which may support higher demand for coffee in the US market. Certified stocks increased by 15,861 bags to 560,627 bags. Pending grading decreased by 3,930 bags to a total of 102,082. Graded today a total of 22,290 bags, 16,146 passed and 6,144 failed.
Robusta pushed to new Highs today finding good support at the 8 day moving average today at 3319 for the main contract May24. The London market May24 contract settle +70 at 3385 with a total volume of 17,543 lots including 3,716 switches. The next resistance is in 3460 the high from 3 weeks ago and the upper Bollinger band today at 3467. Regards, |
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