Arabica coffee futures set new lows for the week before Jun23 options expiration tomorrow. The dollar strength capped all gains early in the session. CECAFE brasil exports reported a 19.9% drop for the January to April period compared to the same period last year and a 10.3% drop in April compared to the same month last year. Next week kicks off with GCA data on Monday. The most active contract Jul23 settle 295 points lower at 183.00 cents per pound. US Inflation and jobs are again the focus today. The producer price index rose just 0.2% month-on-month in April, down from analyst expectations of 0.3%, but also much better than the deflationary contraction of 0.5% in March. The headline PPI rose 2.3% year-on-year in April, down from analyst expectations of 2.5% and below the 2.7% posted the previous month. First-time claims for unemployment benefits rose to 264K in the week ending May 6, up from 242K the previous week, and well-above analyst expectations of 245K claims. Arabica certified stocks decrease 3,445 bags to 646,385 bags. Pending grading 0.
The Robusta Jul23 contract settled at $2393 -88 with a 2500/2386 range. Early in the session, flat prices got off to a strong start, posting a new high of 2500 base N3, quite likely this was short term specs / new longs stop hunting at the psychological level. However, no stops were uncovered, and we drifted lower. Coming into the final hour of trading, a flurry of aggressive selling hit the market, causing a sharp drop of $64 seemingly with no clear reason other than a rejection of the highs and a long liquidation into a vacuum of buying. Nearby spreads weakened a touch due to the selling, with Jul/Sep seeing a daily low of +18, levels now seen since early March, at just short of 4k lots. The CSO Buy Jul23/Sep23 0 puts - Buy Jul23/Sep23 -10 puts traded 2250x @ 10.
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