october 14, 2022.
Arabica coffee futures closed lower today pressured by speculators motivated by the collapse of the structure. The benchmark contract for December delivery closed 545 points lower at 196.70 cents a pound. Volume increased significantly reaching 64,005 contracts, boosted by 20,406 switches. The most active switch, December-March, reduced its premium to 3.70 cents, after having traded with a premium of 10.50 cents last Tuesday. More regular rains in Brazil and forecasts for similar conditions next week fueled the bearish sentiment. During the week, Arabica coffee prices fell by near 10%. The drop was mainly due to liquidations and aggressive selling by specs and funds. The breakout of the recent consolidation area and a weakness encouraged the sell-off, which found no support. This Monday the GCA US stocks data will shed some light on the flow of fresh coffee, after an increase in shipments from Brazil. In September 2021, stocks fell by 107,000 bags and the average change for the last five years is down 124,000 bags. The figures for Arabica exports from Brazil showed an increase of 18%, according to a CECAFE publication. Certified stocks fell by 7,980 bags to 400,439 bags. Pending grading remain at 3,436 bags. During the week, 16,280 bags were withdrawn from ICE.
In London, the Robusta contract for January delivery closed down $46 or 2.2% at $2,051 a ton. Price action was largely influenced by New York. Good activity from speculators when breaking each support level accelerated the decline. Worries about consumption in Europe with the fall in the purchasing power of the euro and to less than 13% year on year, and fears of recession and inflation, keep participants concerned.
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