The New York coffee “C” market closed lower Thursday as the forecasted cold weather did not cause any known damage. The market was supported early by early reports indicating that in some areas, the temperatures fell to frost levels. However, as the session progressed no damage to the main coffee producing zones was reported. According with weather services, a few areas may have seen surprising below frost level
temperatures. The frost threat will be diminishing as temperatures will be gradually warming over the next days. The most active contract for September delivery, settled 335 points lower at 156.40 cents a pound.
Volume was moderate with a total of 59,247 contracts, including 17,943 switches traded. A weak real continued to add the bearish sentiment. The dollar/ real exceeded the R5.00 on renovated concerns over the
covid-19 pandemic in Latin America. Arabica certs decreased by 17,831 bags to 2,171,324 bags. Pending 35,449. Grading today 3,650, passed 1,000, failed 2,650.
Another structure dominated session as both Sep21 and Nov21 based spreads narrowed into premium through a layer of commercial short rolling supporting values. The CSO market continues to add fuel to this fire
with 1,500 nov21/jan21 $40 premium/ $20 discount fence to the call trading at $7, as the commercial sector are happy to pay premium to protect against squeeze potential later in the year. This naturally draws ongoing
support into outright prices in London, which is not replicated in Arabica reflective in the arbitrage weakening to 79 cents versus Sep21/Sep21.Technically Robusta is moving into overbought territory whilst hugging the
upper Bollinger band averages. However, upside trend strength remains firm which for now holds longs into the move above $1700.
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