The Arabica coffee futures market closed higher on Tuesday in a session dominated by spreads trading. The contract for March delivery ended 135 points higher at 177.05 cents per pound. Activity was driven by switches, with volume reaching 103,871 lots, including 38,682 switches. As the forward curve normalizes, it attracts the appetite of the participants. Commercial activity was not significant as short-term speculators were the main players on the day playing both sides of the market and looking for a break of the recent range between the 171.00 and 179.00 levels. The sentiment that the Brazilian crop will not be as large as previously expected continued to support prices as they traders again anticipate a possible global deficit. Our Brazilian team will publish their estimate for the 23-24 harvest on February 13. The currencies were mixed. Brazil's real was down 1.05% at BRL5.2050, after Lula interfered with economic comments on the interest rates. The Certified stocks increased by 14,525 bags to 887,378 bags. Pending grading were down 24,092 bags to 12,100 bags. Grading today 24,092 bags. Passed 14,625 bags. Failed 9,101 bags.
Robusta MAR23 contract settled at $2082 +44 with a 2084/2041 range. With market showing signs of support in yesterday’s session flat price found a base for a rally today. Seems most of this rally was H3 shorts rolling into K3. H/K traded 3.7k lots between 0/10. Origin was very quiet with sporadic small selling seen. May23 1750 puts vs 2055Δ6 traded 1000x @ 7, May23 2200/1900 strangle traded 1000x @ 68.
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