Arabica coffee futures for May delivery fell 365 points to settle at 189.70 cents a pound due to long liquidations. As the funds short covering eased, and without any solid buying that could support the market, participants opted to take profit considering also the overbought condition of the prices. Activity was moderate with volume reaching 39,229 lots, including 10,341 switches. A possible near term supply tightness kept the near structures with premium. The forward curve remains with backwardation until the December. Cert stocks 809,566 total with a first increase in a while in the pending grading by 10,412 bags. Certified stocks decreased by 5,400 bags.Open Interest -56 Total 196,072. Short Covering, but is the short covering over? Brazil came back online today after the holiday so we can count on some origin selling at these levels. What is yet to be seen is whether specs choose to sell or go long here.
Key technical levels now to the upside are 195 and the 206-207 region. Support at 183 and 172-170. Tomorrow’s action will be a better indicator of market sentiment for the following week. Options were quiet today nothing notable. Spreads have stalled out since Tuesday: K/N today trading down to 1.30.
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