February 1, 2023

Arabica coffee futures fell Wednesday as the recent short covering appeared to ease. The most active contract for March delivery settled 585 points lower or 3.2% at 175.90 cents a pound. Volume continued to be boosted by spreads trading. A total of 79,806 lots traded, including 25,385 switches, that reflected a large liquidation of the nearby switch. The March / May switch lost 20 points to end at -15. The small increase of the open interest, 672 lots, indicated a small number of new longs not enough to support further advance of the Specs’ profit-taking added pressure on the market discouraged by the technical performance. Technical indicators remain to show the market in overbought terrain. The crude oil fell 2.5% after US inventories increased last week. Cert stocks increased by 9,360 bags to 870,855 bags. Pending grading down 16,598 to 58,851 bags. Today grading 16,598 bags. Passed 10,635. Failed 5,963.  
 
Robusta MAR23 contract settled at $2053 -54 with a 2108/2048 range. After such aggressive short covering in yesterday’s session and no follow through today that was enough of a trigger for both markets to pull back. As we can see from the weaking front month spread this whole move was in the Mar contract. Volumes were strong with over 17k lots trading on H3 and 9k Mar/May trading between 30/10 settling at +11. Mar23 2050/1950 put spread vs 2097Δ22 traded 3000x @ 21, May23 1925 puts vs 2066Δ24 traded 2000x @ 38, May23 2050 puts vs 2050Δ48 traded 1000x @ 97.