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.
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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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