ICE Coffee Futures Climb on Spec
Short Covering Arabica coffee futures climbed Thursday supported by the weak US dollar and the technical outlook. The nearby contract for May delivery closed 2.80 points higher at 138.90 cents a pound and the July contract closed 395 points higher at 140.80 cents a pound. Short players were forced to cover positions as the origin selling against the May position eased and prices moved above the recent resistance levels. The US dollar declined against major currencies following economic data showing the economy could grow at slow pace in the near term. In Brazil, the undersecretary of finance for agricultural sector rejected the idea of subsidies for the coffee sector. Dealers and farmers have been waiting for several weeks’ government measures to help the coffee sector. London: Robusta continued to trade around the same features as players addressed the spot month exposure with the discount recording a slight narrowing during the morning session. Switch interest extended further down the board with the July/ Sept trading out towards $18 this week, before edging narrower during early trading today. No Grading put forward today which means during the last 2 weeks the Exchange has approved 220 lots in preparation for the updated stock report which will be released after the close this evening. Spot month in London reflected the 2,000 Swap trades yesterday down 4,608 lots which still leave a working balance of almost 21,000 lots which is still big. This numbers should start to fall away quickly swinging into next week with the expected open position into delivery period of 5,000 lots as an estimate. Taking encouragement from the intraday rally in New York the board was able to break down the 2080 pivot in July and move action above the better averages into the closing sequence of the market. The move did uncover the first origin business of the week which was absorbed quiet well. Against the flat price strength the spot month structure gave ground easing back below the $40 discount marker. Prices must consolidate the action to prove the break of averages into the weekend.
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Arabica coffee futures for delivery in May lost 4.25 cents to settle at $1.3590 a pound, the lowest settlement in two weeks. Top coffee grower Brazil exported 11% more coffee in March than a year ago, while Colombia's coffee exports that month rose 12%. Colombia's coffee production rose 7% in March, despite a two-week strike by thousands of the nation's farmers. Higher shipments from the two countries--the source of more than one-third of the world's coffee--are helping to counter crop loss due to an outbreak of a coffee-eating fungus in Central America and Mexico. The International Coffee Organization said in a report on Monday that increased production in other countries has "compensated" for the damage caused by coffee-leaf rust in Central America. |
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