december 8, 2022.

Arabica coffee futures for March delivery settled 150 points lower at 158.70 cents a pound. Without fundamental news the action was driven mainly by short term specs pushing the market down in accordance with yesterday’s weak performance. Activity was moderate. Volume reached 30,419 lots including 7,580 switches. Colombia markets were closed on holiday. Traders are waiting for perspectives and possible estimates of the 2023 Brazil crop as some tours have begun to survey the main coffee areas. The crude oil hit the lows of the year, unwinding all gains made after the Russia invasion to Ukraine. Arabica certified stocks increased 9,691 bags to 668,581 bags. Pending grading declined 9,165 to 395,432. A total of 17,246 bags were graded today. 11,516 passed and 5,730 failed.  
 
Another overnight draw of 128 lots in the Robusta certified stocks reduces stock levels to 7,626 lots, down 900 lots since the start of December. This naturally helps spot structure hold the current premium, with conversations around the market dominated by chatter of Jan23 tightness. Open interest fell 942 which mainly emanated from the commercial short managing spot exposure as nearly all flow out of origin continues to favour March23 and May23.Technically the market continues to operate through a bull trend, straddled by the mid and upper Bollinger band averages. Although values operate in overbought territory, a firm trend strength deters players from countertrading/ selling the move which for now remains intact. However, if values are unable to test the psychological $1900 marker over the near term, upside trend strength will dwindle encouraging a wave of liquidation into year end.