february 27, 2023

Arabica coffee futures May23 contract initial session support was found at 185.70, the NY market slowly built the movement above previous day high and struggle to maintain gains above the 189.00 resistance, halfway thru the session it opted to test the downside with a minimum change of 15 points lower and a settle at 186.30. Open Interest since Thursday has stayed flat as market consolidates between 185 and 195. We see short term upside here as capped from 200-205, with a downside move to support at 180-175 more likely if market continues to fail to gain momentum. Origin selling has been mostly absent to start the week, commercials have been more focused on book squaring waiting for the market to find direction. ICE Arabica certs declined 7,230 bags to 787,345, pending grading increase 43,877 bags to 54,929. No grading today.

Robusta MAY23 contract settled at $2140 +7 with a 2145/2123 range. Day started off with some strong selling coming from India putting pressure on flat price and keeping a lid on any rally through yesterday’s high. Other than that, it was a relatively low volume quiet day with only 6k lots trading on May23. May/Jul traded 1.7k lots between 11/13. May23 2350/2050 strangle traded 220x @ 53