september 6th 2022

Arabica coffee futures for December delivery closed 145 points higher at 230.25 cents a pound. Volume was  moderate with a total of 33,628 lots being traded including 8,784 switches. Speculators' buying was encouraged after prices found support against the mid value of the Bollinger's study. Although some rains are  expected for the southern areas of Brazil, the forecasts are not very clear, and a dry pattern could return after a week. Concerns about the lack of coffee for the next season continue among dealers. Rabobank adjusted its previous estimate of surplus for the 2022/23 season of 1.7 million bags, to a deficit of 1.3 million bags, mainly in the Arabica output. Global production was estimated at 169.0 million bags from 172.3 million previously estimated. Arabica certified stocks decreased by 4,772 bags to 630,424 bags. Pending grading: 65,119 bags. No grading today. Brazil markets will be closed on holiday tomorrow. Robusta NOV22 contract settled at $2262 +45 with a 2269/2210 range. Strong performance without the support of Arabica, I think due to the issues fundamentally in Arabica roasters are turning to Robusta to fill gaps / change blends hence the divergence today. Volumes remain on the lower side with 8k lots changing hands on NOV22 and 2.5k on the most active spread (Nov/Jan) between 7/17. The close today meant we are now back into the middle of the most recent range 2200/2350 next resistance level seems to be 2325. NOV22 2150/2000 put spread lu vs 2252 traded 2500x @ 30. No new CSO’s going through.