Arabica coffee futures fell for third consecutive day as long players liquidated positions ahead of the first notice day for the July position. The most active contract for September delivery settled 385 points lower at 172.25 cents a pound. The volume reached 68,871 lots including 21,182 switches. The most active nearby switch traded in an ample range between + 170 and – 190. The recent liquidation was evidenced as the open interest contracted 5,365 lots to 175,624 lots yesterday. Good size trades of short calls and long puts added pressure on the futures. The price outlook remained to be darkened by fundamentals. Origin differentials continue weak encouraging again the coffee flows to the board. A global supply and demand balance report released by CoffeeNetwork, foresee a surplus of 6.65 to 7.6 million bags for the 2022-23 season and 6.8 to 9.83 million bags for the 2023-24 season. An increment in global production and decline of the demand’s growth being the main reason. Cert stocks declined by 635 bags to 541,139 bags. Pending grading totalizes 14,427 bags. No grading reported so far. The USDA will publish the World Coffee report tomorrow 3PM.
In London, the Robusta market fell from recent highs influenced by New York price action. The September position closed $44 lower at 2726 a ton, after trading between 2780 and 2683 range. The selling was mainly speculators profit-taking after the market hit record levels of $2,797 a ton the previous week. Concern about El Nino's effects on Vietnam's plantations later in the year continues among traders. Good industry demand and shortages of fresh coffees have kept Robusta prices firm. The Arabica-Robusta arbitrage has fallen to $0.50, a level not traded since late 2020.