september 28, 2022.
Arabica coffee futures for December delivery closed 435 points higher at 228.70 cents a pound, helped by the recovering of stock and commodity markets that encouraged speculative buying across the board. The session was highly volatile as prices recovered more than 905 from the lows posted early. The nearby, Dec-Mar switch gained 1.10 cents premium to finish at 9.15 cents. The possible tightness in the physical market and the recent drop in certified stocks have contributed to the strengthening of the Dec-Mar which has expanded 6.20 cents % since the beginning of July. Agronomists attending a conference at COOXUPE, the largest cooperative in Brazil, said last night that soil moisture levels have recovered very well to support the development of the next crop. During recent weeks, the rains have improved, and the forecasts seem to show a better wet pattern in the next days. The dollar eased a bit adding support to the complex. Oil recovered 3.3% with Brent trading at $89.12, supported by the closure of production in the Gulf due to Hurricane Ian and low inventories. Arabica certified stocks fell 5,076 bags to 444,699 bags. Pending grading: 640 bags. No grading reported today.
The Robusta terminal ends the session just shy of 1% higher amid subdued conditions as participant focus remains firmly Arabica based. Early macro inspired weakness saw levels fall to values last seen mid-August, as the speculative community probed the downside through limited roaster interest. However, we were unable to attract a secondary layer of sellers to hold downside momentum intact and with the ‘C’ contract driving gains, early shorts in London ran for cover pushing value back above $2200 as origin pressure was noted more by absence. This reversal held for the remainder of the session, which also drew strength into spot structure with Nov/Jan trading out to $11 premium after testing towards level money earlier in the day. Technically the market expresses further upside potential as values reversed from the lower Bollinger band average, prompted slow stochastics to cross higher towards oversold territory, confirmed by an increased in trend strength.
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