august 31 2022

Arabica futures for December delivery settled 5 points higher at 235.25 cents a pound. Volume reached 26,444 lots including 7,209 switches. The active Dec22/Mar23 switch gained 50 premium trading to a high of 6.90 cents, near the recent high for this structure. Firm differentials and the possible tight supply of fresh coffee is causing the steepened of the spreads. A good example the Dec22/Dec23 settled at  +18.40.
 
Commodity and equity markets continue under pressure. The Brent declined 3% trading at $96 per barrel and the major stock indices were losing 0.3% during the early hours. During this month, Arabica futures gained 10.1%. Weather concerns in Brazil supported the market that was accompanied by a solid technical performance. Certified stocks increased by 591 bags to 672,585 bags. Pending certification fell by 20,917 to 69,222 bags. Today 25,649 bags were classified, 16,810 bags passed and 8,739 failed. The NY market will be closed on Monday due to Labor Day holiday  
 
Robusta NOV22 contract settled at $2250 -11 with a 2285/239 range. With the absence of fresh news and / or fresh buying Robusta continues to drift lower back into the middle of the most recent consolidation area. Volume was poor on NOV22 flat price with just over 5.5k lots trading. Another choppy day for NOV/JAN on small volume 11/20 range on 1.4k lots. The interest today was again the CSO market, 2300 lots of the MAR/MAY 40/-10 fence traded at $3. The NOV/JAN 40 call traded 1500x @ $8 (possible unwind) or adding to the 7.2k OI will wait and see tomorrow. Support level remains 2220 area yet to be tested on this move lower.