A general drop in the commodity markets and technical factors contributed to putting pressure on the Arabica coffee futures today. The recent commercial buying that had supported the prices recently ended. The active contract for July delivery settled 625 points lower at 193.90 cents a pound. Volume declined as usual after the first notice day. A total of 32,733 lots were traded, including 6,777 switches. A total of 254 delivery notices were issued last night for the May position. An expected corrective move in the coffee prices was triggered today as prices broke fresh support levels, with values overbought that contributed to adding weight. Commodities continue to fall over concerns of oversupply and global demand contracting. The price of Brent crude oil fell 2.8 percent to near $8 a barrel, a three-week low. Arabica-certified stocks fell by 540 bags to 699,508 bags. Pending grading remains at 0.
Robusta Jul23 contract settled at $2374 -12 with a 2392/2360 range. Flat price seems to be taking a breather around these levels, unable to find a sponsor through the 2400 level but also unwilling to give up recent gains. Daily volumes are decreasing with OI falling, not a particularly bullish combination. One thing that is providing some support to flat price is the strength of the structure. Switch May23/Jul23 remains strong trading up to a recent high of +90 on 2.3k lots. Two trading days remain prior to My23 FND, OI is 13.5k lots -8.8k from yesterday’s number. Jul23 2200/2000 put spread vs sell 2700 call traded 300x @ 8.
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