Arabica Coffee Futures Arabica Extend Losses. Robusta closed on Holiday
The New York coffee “C” markets closed lower on Monday mostly driven by speculative selling on technical weakness. Algorithm and computer systems joined the selling wave. The most active contract for July delivery lost 5.50 cents to settled at 195.20 cents a pound, the lowest since April 1st. The breach of the 200 level was a major disappointment for long players who were expecting a bounce from what could have been a base formation, which is now doubtful. The nearby switch (July/Sept) fell 45 points, adding pressure to the prices today. The open interest dropped 5,209 lots as of Friday, evidencing the massive funds liquidation. Fundamentally, the market will remain focused on the harvesting of Brazil’s crop and if any changes to yields are expected compared to forecasts which were issued earlier in the developmental cycle (usually around flowering time). In the coming weeks, the USDA will continue to publish their attaché coffee reports, which will be the first forecasts for the 2024-2025 crop. In June, both StoneX/CoffeeNetwork and the USDA will reveal their estimates for global supply and demand. CECAFE will release the Brazil’s export data next Monday May 13th. Commodities were mostly higher today. Brent Crude Oil rose 0.68% to 83.52 and Spot Gold Futures gained 1.17% to 2,328.76. The Dow Jones Industrial Average rose 0.34% to 38,807.73 and the Stoxx Europe 600 Index was last seen at 507.8, up 0.45%. Certified stocks decreased 2,220 bags to 686,958 bags. Pending grading increased 32,220 bags to 117,977 bags total. No grading done today.
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Coffee Futures Suffer Sharp Fall
Arabica coffee futures extended losses on Friday as funds continued to exit the marketplace. The most active contract for July delivery settled 5.35 cents or 2.6% lower at 200.75 cents a pound. The open interest dropped 2,723 lots yesterday, reflecting the exit of funds. The Arabica market lost 23.25 cents during the week or 11.4%, the largest weekly loss since July 2021. The specs selling have been triggered this week, as the important levels of support have been violated by the prices. A general weakness of the commodity complex adds the bearish sentiment. Arabica cert stocks increased by 7,142 bags to 689,178 bags. COT(CIT) NY Arabica . Non-commercials cut net long position by 1,728 contracts to net long 48,973 in week to April 30. In London, the Robusta market closed sharply lower. The active July position settled $139 or 3.6% down at $3,541 per ton. A hefty fund liquidation pressured the market that lost 18% from last ‘s week historic high. Overbought conditions and reports of some rains in Vietnam caused the selling. This has naturally seen the algorithms track momentum lower trigger stopped a key resistance areas and eroding heavy roaster buying on route to the intraday lows. Technically outlook would still allow further losses, but participants will focus on oscillators nearing oversold conditions as we touch the lower Bollinger band averages. |
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