Arabica coffee futures settled 3.9 % higher on short covering and speculative buying. The most active contract for July delivery closed 755 points higher at 199.05 cents a pound at 199.05. Commercial buying ahead of the beginning of the delivery period next Thursday supported the market. A significant number of specs short players were caught out of guard were forced to cover positions. During Friday’s session they accumulated positions after noting lack of strength to beat the resistance level at near 200. The firm technical performance accompanied the action. Latin American currencies slipped modestly; however, it did not seem to put any pressure on coffee prices. Cert stocks decreased 1,075 bags to 709,612 bags. The GCA stocks at the end of March fell by 88,690 bags to 6,016,272 bags, slightly under the 5-year average . Last year during March the stocks declined 54,950 bags.
Robusta Jul23 contract settled at $2370 +16 with a 2373/2331 range. story remains the same continued speculative buying into very little origin selling. With strong backwardation down the board this gives support to prices due to the fact that it ‘’pays’’ to hold a long position. Couple this with last week’s soft US PPI and CPI data cooling the USD which in turn is bullish commodities. May23/Jul23 remains firm 67/79 range on 3.2k lots (shorts seem to have no choice but to pay up). Jul23 2200/2300 callspread vs 2366Δ14 trades 200x @ 63
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