november 29, 2022.

Coffee futures for March delivery closed 605 points higher at 168.90 cents a pound. Activity remained subdued with 22,085 lots traded, including 3,821 switches. Speculators buying was encouraged following the recovery of stock and commodity markets which reacted positively on rumors and speculations that the Chinese government would ease COVID restrictions following the weekend unusual protests. The coffee market was also helped by Citigroup's report on the rebalancing of index funds that could generate fresh cash to the markets. It is estimated that coffee and cotton could receive up to a billion dollars as a result of the annual rebalancing. The banks used prices at the end of November to estimate the participation, but they recalculate the ratios at the beginning of January before the rebalancing that is scheduled between the fifth and ninth day of the month. Certs stocks increased by 10,054 bags to 575,907 bags. Pending grading decreased 22,022 bags to 472,097 bags. A total of 19,832 were graded, 11,261 passed (56%), and 8,571 failed (44 %).  
 
Robusta JAN23 contract settled at $1859 +4 with a 1873/1835 range. A 6+ cent short covering rally in Arabica prompted spec buying into Robusta, however this ran into a thick layer of Vietnam selling that just absorbed all of that buying. Resistance level remains 1879 base F3. Volumes on the JAN23 contract were steady with 8.7k contracts changing hands. JAN/MAR had a 25/35 range on 4.4k lots. Jan23 1950/2050 call spread vs 1865Δ16 traded 1500x @ 12, Buy 1x Jan23 1825 puts - Sell 3x Jan23 1700 puts traded 850x @ 17.