Arabica coffee futures fell significantly on Thursday influenced by a substantial drop in Robusta prices in London. The drop accelerated after prices fell below the lows of the previous two sessions, attracting sales from speculators and triggering selling stop orders. The most active contract for July delivery at the ICE exchange in New York, closed 9.90 cents or 4.5% lower at 206.10 cents a pound. The volume increased reaching 57,435 lots. Likewise, the volume of switches was high in 14,154. The fall impacted the nearby July/September switch which lost 20 points ending at 1.75 cents and the forward curve which lost backwardation but remains inverted. Players have been adding shorts as the market failed to recover. The open interest increased 2,319 lots as of yesterday. The continue sell-off of the cocoa market added bearishness to the soft complex. Cocoa prices have lost 29.99% or $3,241 to $7,563 so far this week. The dollar retreated as focus returned to chances of interest rates to be cut or staying higher for longer time. Cert stocks increased 14,660 bags to 682,036 bags. Pending grading decreased 21,305 bags to 58,715. Today a total of 21,580 were graded, 14,735 bags passed and 6,845 failed.
Robusta Jul24 contract settled at $3,680 with a 3999/3620 range. No other way to describe todays activity other than a total collapse, $379 range. A move like this outside of weather markets is unheard of. Essentially the hedge lifting stopped and the recent roaster interest had eased which forced the speculative community to liquidate into a total vacuum. Sporadic commercial buying was defiantly noted but due to the fact there was very little ‘’resting’’ bids there was nothing there to absorb the relentless speculative bailout. Volumes were good for Robusta with over 25k lots trading on the July contract alone. Nearby structure weakened a touch seeing a 56/70 range on nearly 7k lots. Robusta Jul24 3500 puts vs 3780Δ25 traded 1000x @ 75, Robusta Nov24 3500/3000 putspread traded 750x @ 220, Robusta Jul24 4000 calls vs 3800Δ35 traded 750x @ 132.
0 Comments
Arabica coffee futures consolidated lower Wednesday on eased volatility after the previous wild session. EU and Latin America holidays contributed to the slow day. The active contract for July delivery closed 65 points lower at 216.00 cents a pound. Volume reached 46,177 lots including 11,904 switches. The nearby July- September switch gained 10 points premium to end at 1.95cents. Today it traded up to 2.10 near recent highs. The market structure has again gained backwardation to the extent it appears predicting that the physical tightness could be prolonged given the Robusta situation in the global supply/demand balance. The dollar was firm during the session as market’s participants were awaiting the FED's announcement on interest rates. As expected, the FOMC kept rates unchanged at 5.25%-5.50 % range. However, the FED signaled it is still leaning towards eventual reductions of the rate, but noted recent disappointing inflation data could cause a delay on the decision. Cert stocks increased by 7,618 bags to 667,376 bags. Pending grading down 6,243 bags to 80,020. Graded today: 9,678 bags. Passed 7,618 (2,233 BR, 4,560 NI, 825 PE). Failed 2,060 (960 BR, 1,100 PE)
Robusta Jul24 contract settled at $3,978 -43 with a 4058/3955 range. Another sluggish session with a new recent low printing. It seems although rumours still circulate around the fundamental situation this is not having a great impact on flat price. Commercial participation is sporadic with light scale down buying seen and virtually zero origin selling. With no fresh news momentum slows and short term specs start to sell. This lack of commercial interest is reflected in the poor outright volumes, only 10,205 lots traded on the most active Jul24 contract. Structure weakened a touch, Jul/Sep saw a 70/84 range on 3k lots. Robusta Jul24 4500 calls vs 4016Δ22 traded 750x @ 72. |
|