december 1, 2022.
Arabica futures for march delivery settled 415 points lower at 165.75 a pound. The market traded at four-week highs on early hours supported by currencies and speculative buying encouraged by the last two sessions. Later, the session, specs liquidation pushed down the coffee prices. The early action was capped by the resistance against the 175 level of the March position. Good activity was noted on the switches. The forward curve begins to gain contango specially on the front months, as the market structure tends to normalize. The dollar index fell to a 16-week lows following US consumer data recovered solidly in October, adding to yesterday signal from the FED of decreasing the pace of the interest rate hikes as early as this month. Certified stocks increased by 13,423 bags to 605,192. Pending grading 452,855 bags. grading today 21,440. Passed 13,423. Failed 8,017.
The Robusta terminal ends the session only marginally higher after early macro related buying eased whilst origin pressure remains firm in front of an early Tet. The dovish undertone from the Fed encouraged most participants to enter the session amid a more constructive tone, this saw levels in London open at unchanged before a wave of speculative buying hit the terminal driving values back up to levels last seen in October $1879 basis March23. These gains swiftly eroded resting origin scales based in March23, which naturally encouraged further gains in the spot structure with jan23/mar23 trading up to $49 premium. However, with heavy loses observed through the ‘C’ contract into the later stages of the session, London tracked and fell back towards opening levels into the closing bell, a result of intraday speculative short covering moving into a vacuum of commercial buying.
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