Arabica lost 250 point to close 160.20, while Robusta shed $36 to 1675. Prices were under modest pressure early as risk management ahead of the next two day’s chillier forecasts in Brazil was taken care of yesterday and a stronger dollar overnight offered a headwind. Overall trading was fairly dull however, and prices were in marginally positive territory around 8am. Selling over the first hour of the traditional trading day led to fresh lows, but it wasn’t until 9:54 when around 1000 lots went through, 605 of them trading on the bid vs 326 on the offer that real damage was done. Futures immediately bounced off the 158.15 low and were on the north side of 160 within 10 minutes, but follow up volume never materialized; with the axed selling done and resting bids filled quiet permeated the market place. Private forecasters largely discount the likelihood of significant frost damage in Brazil with the coldest areas of Sul de Minas predicted to hang just above 0, though some patchy impacts may be noted. Public forecasts such as CPTEC would appear more concerned, yet in all the market seems to be taking the risk in stride. KCU/Z weakened 15 points to -2.90, hardly a signal of commercial fear, while RC U/X widened $3 to -15. Arabica certs rose 7578 bags, 5388 Hondurans (Antwerp) and 640 Brazils (Germany), while Robusta certs fell for a 26th consecutive business day, a 155,333 aggregate bag decline since the May 20th recent peak.
Arabica coffee futures for September delivery settled 195 points lower at 152.10 cents a pound. Volume declined substantially as typical after the first notice day. A total of 26,146 lots traded, including 5,490 switches. The bearish sentiment was influenced by the USDA global coffee report. Despite that the individual data by countries was already known, an adjusted of the initial inventories resulted in a balanced global supply /demand with no deficit for the coffee year. At the same time, the sentiment was affected by a revision of the
Brazil’s 2020/2021 output by Rabobank. The production was revised up to 72 million bags from 67.5 million previously estimated. This will be the highest estimate for the 2020/21 production published. StoneX Brazil estimated the production at 65.1 million. The bank conducts telephone surveys without visiting farms to make their coffee estimates. A total of 99 delivery notices were issued last night. Certs stocks increased by 5,790 bags to 2,168,547 bags. Pending for grading decrease by 4,323 to 43,412. Grading today 7,325. Passed 5,790. Failed 1,535.
Pre notice day pressure weighs on values, with Robusta ending the session over 1% lower amid limited roaster support. July21 working exposure stands now at 12,506 lots below certified stock levels which most likely will be covered/ neutralised by financing rolls within the next 48 hours. Technically the market is approaching oversold conditions whilst holding nearby average. Most players will mark the nearby weakness merely against pre FND pressure and ultimately believe the baseline pattern between $1600 and $1593 willremain intact.
The New Yok coffee “C” closed higher today supported by speculative short covering after the market bounced from previous session’s lows. The most active contract for September delivery settled 210 points higher at
154.05 cents a pound. Volume declined to 42,012 lots, reflecting less spreads activity ahead of the FND tomorrow. Coffee prices have been under pressure during the recent sessions falling more than 11 % from the highs Short players participation has been attracted because of the heavy spec liquidation and origin selling. Technical factors and the respect of the support levels discouraged additional selling today, and at the same time triggering the short covering. The diminished commercial selling helped the market. Dollar weakness added lending support to the commodities with the dollar index losing 0.4%. The Brazil’s real gained 1.3 % before the dollar, trading at BRL5.0170.
The Robusta market posts a resilient performance once again holding support resting at nearby averages just below the phycological $1600 marker basis Sep21. The market has now formed a solid baseline at $1592 as values have failed to attract sustained selling at the lower end of the recent range, with both origin and spec pressure unwilling to track weakness. This has allowed primary focus to shift back toward July21 management as first notice day approaches with the overnight exposure 17,879 lots nearing the current certified stock levels standing overnight at 15,276, with the market waiting to see if a financing roll is registered via EFP over coming days indicating unchanged certified ownership.
Arabica coffee futures reversed direction Friday to close higher helped by speculative short covering. The most active contract for September delivery settled 35 points higher at 151.95 cents a pound. Prices were under pressure early trading down 2.3 % or 2.45 cents to 149.15. The weak technical outlook encouraged the initial spec selling. The respect of the lower band of the Bollinger, oversold conditions, and book squaring before the weekend triggered the short covering when the selling eased. During the week, Arabica prices lost 7.65 cents or 4.8 %. The market was affected by a general sell-off of the markets following the strengthened of the dollar on FED news. The breach of the uptrend accelerated the speculative liquidation. Weather in Brazil was dry
across the coffee belt, and temperatures fell to single digit but without any frost threat expected at least for the next ten days. In Colombia, the protests have paused but it will take 3 to 4 months for the normal flows of coffee shipments to ports. Premium for Colombian beans raised to 75 cents from 55 cents premium before
the national strike, according with report from Reuters. Technical factors may discourage selling in the short term, as prices are oversold (RSI 27.7%), and SSTK with a buy signal (SSTK 20 %/ 17%). Reduced commercial selling after the July FND (June 22nd) will allow prices to soar more freely.
The recent wave of non-commercial de-risking eased today, encouraging values in Robusta to mount a reversal of yesterday’s losses to end the session 1% higher. Light follow- through pressure from the previous session saw values open marginally lower and swiftly test below $1600 basis September. However, consistent roaster scale down buying between $1600 and the previous low at $1594 slowed the early pace to the downside and
prompted a reversal up to the intraday high at $1622 as fund and origin selling was noted more by absence. A brief retest below $1600 was encountered through the mid-session tracking losses generated in Arabica, but
the situation was unchanged as the market failed to attract a fresh selling element towards the lows whilst further commercial support was uncovered sending values north into the closing bell. Technically the market is running into key support resting at nearby averages and congestion at the psychological $1600, which is slowing downside trend strength after encountering a week of negative macro influence.
Arabica coffee futures closed lower Thursday in a broad market sell-off. The most active contract for September delivery settled 385 points lower at 151.60 cents a pound. Speculative liquidation continued to be encouraged by the weak technical perform. Since the breaking of the uptrend, more than 10,000 contracts have been liquidated as evidenced by the open interest. A typical reduction of the OI is reasonable ahead of the FND as well. Commodities declined hard affected by the rally of the US dollar, following yesterday’s FED statement that they might bring forward interest rates hikes faster than expected before. The outlook for beneficial rains for the US mid-west caused a sharp fall on the grain complex that spilled over other markets. In the soft complex, sugar fell 2.6 % and Cocoa 1.78 %. As reported by Bloomberg, some commodities have erased the 2021 gains. Support against the lower band of the Bollinger band and prices near oversold conditions could help the market before the weekend.
Robusta settled at $1598 per ton down $31 ref Sep. Market gaped down from the opening bell with the first trades 19 points lower trading at $1610 held the previous day low at $1592 coming close to erasing all the gains from previous session. Once again, the 20-day moving average provided support now standing at $1587. The dollar seems to be taking a greater effect on Arabica with Robusta acting as secondary market and walking down the latter slower thanks to partial support from the brasil real strength. Volume was moderate with 23,710 lots including 7,384 switches. Light business reported from Vietnam. Limited supply and weak demand pushed traders to the Indonesian market.
The New York coffee “C” market closed lower for second consecutive session as spec liquidation continued. The active contract for September delivery settled 295 points lower at 153.25 cents a pound. The volume of transactions declined as the July position approaches the FND next Tuesday June 22nd. The active
July / September switch has been trading steady inside a narrow range, disappointing participants that were expecting more volatility. The market fell under the spec selling, as the weak technical outlook discouraged bargain buyers for the moment. After the breach of the long-term trend, prices need more development to
define a corrective move or a change of trend pattern. For the September contract, support now is at 151/150 area and resistance is at 159 /160. The weather in Brazil began to turn cold. Some areas of Minas Gerais registered temp of 4 C. No frost is expected for the next 6-10 days period.
US Green coffee stocks rise by 52,571 bags to 5,815 138 bags at the end of May. Last year GCA Stocks increased by 300,253 to 6,818,120 bags. The five-year average variation is an increment of 197,000 bags and a level of 6,645,049 bags.
Robusta settled at $1600 per ton up $4 ref Sep, Market held the previous day low at $1581 finding resistance at the 8-day moving average closing slightly positive as oppose to Arabica. Unable to continue yesterday downtrend market finds itself in a tide range between the 20 day moving average as support and the 8 day moving average as resistance with levels of 1579 and 1607 respectively. Volume was light with 13,795 lots including 4,311 switches.
Arabica coffee futures for September delivery settled 120 points lower at 159.60 cents a pound on general decline of the equity and commodity markets. Activity continued to be boosted by spreads trading. Volume reached 79,511 lots, including 25,497 switches. The commodity complex was affected by the strengthened of
the dollar, after investors factored the inflation figures as temporary and not affecting the FED policies. The Brazil’s real weakened to BRL5.11, adding pressure on the coffee prices. According with local sources, Brazil’s producers have sold 40 % of his year year average of 26%. Higher prices in international and the local market have contributed to induce farmers to accelerate the sales of this year crop, even establishing forward contracts up to 2023. Exports during May fell 20 % to 2.34 million 60-kg bags from May 2020. Lack of containers affected the normal flow, Cecafe said. Participants will focus on next week GCA US stocks report to be published on Tuesday.
A subdued end to the trading week as values held the previous low but were unable build significant intraday gains, ending the session only 0.5% higher. This saw july21 management take centre stage as the commercial short were consistent buyers of spot structure sub $27 discount. Technically the market it’s trying to form a baseline at $1600 basis Sep21 as longer-term upside dynamics remain intact. Heavy options volume registered with 1,500 Sep21 1525/1425 put spread versus a 18% delta hedge at $1612 trading at $24. This is most likely the non-commercial long willing to pay out premium to protect downside exposure amid delta management.
Arabica coffee futures recovered ground Thursday, after an early selling failed to attract large participation, prompting short covering. The most active contract for September delivery settled 150 points higher at 160.80 a pound. Constructive macro and fundamental factors continued to support the prices. Dry weather has affected the Brazil’s 2021 /2022 Arabica crop, and recently has raised concerns over the right development of the 2022 / 2023. Despite that the average of precipitations is very low for June, so far total accumulations are almost nil for the main producing areas. Latin American currencies reversed early gains ending lower. Participants will focus on reports of Brazil and the surge of the demand after the summer. Technically, the trend remains bullish. A large triangle formation on the September chart suggests a continuation pattern. Support and resistance are at 156 and 169 respectively. The RSI oscillator with neutral values (50.3%) , while the SSK is close to give a buy signal. A quiet day in the Robusta market today with a narrow range of 23 USD/ton, a close price of 1611 (+3) basis Sep21 and mostly unchanged spreads. Just like in the previous day, the market found support in the 1597- 1600 region indicating that the price decline seen earlier this week may have been just a correction and that the bullish trend continues. Technical indicators have left the overbought region are currently in neutral territory.
Arabica fell for a third consecutive day, settling 159.30, -.55, while London declined $14 to 1582. While the price action was negative, silver linings for the bulls were notable; Friday’s low held, as did trendline support off the early April lows, prices rallied back into settlement, a final print of 160.10 gives a launching pad for tomorrow morning’s trading, and another relatively low volume outright trading environment did little to suggest grudged trading of any magnitude. Nonetheless a down day is a down day, and a 3rd day of inability to break 5.00 by the BRL was a noted cause of concern given the December reversal off similar levels. Trader sentiment is notably sagging. Day 3 of the index roll saw slight settlement improvement in structure as the past 2 day’s heavy turnover took a step back, N/U gaining 5 points to close -2.10, albeit in an equal -2.15 / -2.05 range to yesterday, and with a lower VWAP by the slimmest of margins, -2.11 from -2.10. Tomorrow’s CPI numbers have been a point of focus from coffee traders on the chats, with Bloomberg reporting a consensus estimated for May of +0.4% MoM (0.8% prior) and 4.7% YoY (4.2% prior). That data is set for release 8:30am NY time tomorrow. Friday’s July option expiration is also a potentially pivotal event given the heavy positioning everywhere and cheap expiring protection for those positions.
Arabica coffee futures finished lower Tuesday at the end of a session dominated by spreads trading. The benchmark contract for July delivery settled 245 points lower at 157.70 cents a pound. Volume reached 82,316 contracts including 29,114 switches. The nearby July /Sep switch widened to -2.15 cents reflecting the long fund rolls ahead of the FND June 22nd . Light rains in Brazil Parana and Mogiana areas were reported during the last 24 hours. A more ample coverage will continue until middle of next week, however only small accumulations are expected. According with news cables, international buyers have suspended buying coffee from Colombia due to the non-compliance and shipment delays. Despite some blockades have been removed, still there are disruptions. Shipping from Atlantic ports is more costly. Certified stocks increased by 3,277 bags to 2,109,297 bags. Pending 97,538 bags. Grading today 15,374. Passed 11,412. Failed 3,962. Technically, the trend remains bullish with support at 156 and resistance at 167, basis the July contract.
Robusta settled at $1596 per ton down $29 ref Jul, Market traded through previous day high at $1636 finding heavy resistance above the upper Bollinger band at $1638 tracing down all gains from yesterday successfully breaching the low at $1589 and testing around the 8 day moving average at $1585. Volume has double in the last week trading 35,364 lots including 11,045 switches
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