Arabica coffee futures closed higher Friday as bullish fundamentals continue to support the market. The most active contract for May delivery settled 550 points higher at 185.75 cents a pound. Activity was moderate reflecting the long weekend. The US market will be closed on Monday.
The forward curve added backwardation in the front months reflecting a possible supply tightness in the short term. A total of 62 delivery notices were issued last night against the March position. The technical strength complemented the bullish outlook. The breaking of a key resistance level at 182 places the target at 192 on the charts. The dollar strengthened to a six-week high as traders anticipate that the FED will increase the rates higher than previously anticipated to continue fighting the high inflation. Latin American currencies recovered supported by gains in Mexico and Brazil stock markets. The certs stocks declined 8,374 bags to 832,230. Since last Friday, the certs have decreased by 42,424 bags. The COT report will be published next Friday, February 24. The CFTC will begin with the COT report that was originally scheduled to be published on Friday, February 3, and will release sequentially the missed reports.
Robusta MAY23 contract settled at $2098 +26 with a 2104/2057 range. Both markets managed to breakout of the recent range resistance mainly by speculative buying and little origin selling to absorb. The 2100 level on Robusta is a key psychological area and may provide some short-term resistance. Flat price volumes certainly picked up with 11k lots trading on the May23 contract and just under 5k lots of Mar/May trading ahead of FND next week. May23 1950/1850 put spread traded 1000x @ 17
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