august 23, 2022.
Arabica coffee futures climbed 3.1% Tuesday amid Brazil weather concerns. The most active contract for December delivery closed 705 points higher at 228.25 cents a pound, after hitting a seven-week high of 228.60. The commercial and spec buying boosted the market since early on the session. Despite it is too early on the season, the dry period during the second half of August added to the already drier-than normal conditions raised concerns amid producers that now foresee a ten-day period of high temperatures and no rains for Parana, Sao Paulo and Minas Gerais. A stronger Brazilian currency added support to the market, discouraging local sales. The real finished at BRL 5.1029, up 560 points against the dollar. The greenback fell as economic data showed the US home sales fell in July and private sector activity contracted. The certified stocks increased by 25,917 bags to 653,667 bags. Pending grading: 184,539 down 27,517. Grading today: 30,717 bags, passed 25,917, failed 4,800. Only one delivery notice was issued last night against the September position for the FND.
Robusta NOV22 contract settled at $2258 +15 with a 2260/2236 range. Fairly subdued day considering Arabica broke recent highs printing +7 cents on the day. Volumes remained low with no real commercial activity to note, we seem to be poised for a test of the high 2270 base X22. Option market was busy, in particular the CSO marker, 6000x NOV22/JAN22 0 puts traded today at $4, 2000x JAN23/MAR23 40/0 FENCE traded at $11. Nothing else to note today.
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