Arabica coffee futures for July delivery settled 655 points higher at 189.40 cents a pound. A weak cold front arriving in the coffee-growing areas of southern Minas during the next three days, amid concerns about the Robusta crops, encouraged the fund and spec buying. The Robusta shortage easing any time soon looks low. Vietnam and Indonesia could be affected by El Nino, while Brazil could suffer drought in the Robusta areas. According with the last CFTC COT report released Friday, the non-commercials had reduced their positions the previous week, leaving them with enough power to add long positions again. In addition, lack of producers selling and no related option selling after the expiration of the June allowed prices to move up without resistance. Arabica certs declined 1,959 bags to 642,776 bags.
Robusta Jul23 contract settled at $2488 +56 with a 2506/2420 range. An impressive rally back to the recent highs posting a new high of 2506 base Jul23. With no real fresh news Robusta was certainly being dragged higher with the technical short covering rally in Arabica, and the new shorts that went in last Thursday was forced to cover. Little resistance in the way of origin selling today to absorb the buying. Spreads moved relatively in line with Jul/Sep only strengthening a touch vs settlement, 22/27 range on 1.6k lots. CSO - ICEU - Jul23/Sep 0 put traded 300x @ 5.
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