october 27, 2022.
Arabica coffee futures closed lower on Thursday but recovering modestly after hitting a 14-month low. The active December contract lost 90 points to settle at 178.85 cents a pound. The bearish sentiment continued to be fueled by fundamentals and the weak technical performance. The weather in Brazil continues favorable with rains returning to the south-central areas for the next five days. Only the areas of Baja Mogiana and Cerrado appear that will end with hydric deficit in October, according with SOMAR. Despite certified stocks at ICE authorized warehouses are at 385,465 bags, a 23-year low, talks among traders indicate that 200,000 bags will be presented for grading soon. In the last two days a total of 56,000 bags have been presented and are now pending for grading. Technically, the market remains in oversold terrain, with a slightly bullish divergency that suggest a possible corrective bounce.
Robusta JAN23 contract settled at $1878 +3 with a 1909/1875 range. Fairly subdued session compared with the last couple of weeks but to be expected, sometimes the market just needs to take a breather. Robusta tried to push higher off the back of Arabica having a small intraday rally but couldn’t hold on to any gains closing on the lows of the day finding support on that lower Bollinger band level at 1875. Volume remains stagnant with just over 10k lots on JAN23, but spreads were thin and choppy JAN23/MAR23 had a 10/18 range on only 1430 lots. The JAN 2000/1900 ps LU traded 3650x @ 63.
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