october 26, 2022.
Arabica coffee futures suffered another sharp drop on funds and speculators selling. Amid a bearish fundamental picture, the break of potentially support levels triggered aggressive selling in today's session. The benchmark contract for December delivery closed 605 points lower at 179.15 cents a pound. The volume reached 61,794 lots, including 19,844 switches. Significant activity was noted in the near December-March switch, which continued to lose premium finishing at 2.45 cents. Frequent rains in Brazil have created a better scenario for the upcoming harvest. The sales of funds could stop being so aggressive, to the extent that prices approach the support area of 170, an important level where the rally began at the end of July last year after the frost. Certs stocks declined 1,240 bags to 386,465 bags. Pending grading 26,129 bags. No grading today.
JAN23 contract settled at $1874 -74 with a 1952/1872 range. With the speculative community in full sell mode the market continues to print new lows. A mix of macro and fundamental reasons is driving both coffee markets lower. Roaster buying has been seen but this is not enough to absorb the selling coming from the specs who are now most certainty nett short. Flat price volumes were strong with 12k+ lots trading on JAN23 and 3K Jan/Mar spreads between +10/+17. The Jan 1950/1900 ps traded 500x @ 31 and the Jan 1900/1800 ps traded 500x @ 44.
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