Arabica coffee futures May23 contract settle 135 points lower at 182.20 cents a pound. Initially the NY market continued the positivity seen yesterday at the closing bell, but it soon found itself strangle between the 8-day moving average today at 187.25 on the upside and the 20-day moving average today at 181.45 to the downside. The OI decreased 1,516 lots to 194,659 reflecting a long liquidation with the market unable to sustain the upside attempts. The market has not settled below the 20-day moving average since January 20, which is why a settle below could signal a change in trend. The switch K/N has also shifted to the downside with a settle at 0.70 having traded at a high of 2.10 on February 21st. The switches N/U and U/Z holding a bit better at 1.55 and 2.10 respectively. ICE Arabica certs declined 304 bags to 786,721, pending grading decrease 1,495 bags to 53,434 bags. No grading today.
Robusta activity out of Asia getting to a halt following disciplined hedging programs playing out through the season and industry buying ideas well below current values, the London terminal serves merely as an arbitrage tool. Values remained straddled by the upper Bollinger band average and the 20-day moving average, however the markets failure to attract fresh buying above the previous high and following reversal will place the speculative long on high alert. This happens amid a backdrop of overbought conditions and heavy resistance resting above $2200, with most participants assigning the recent gains to an arbitrage play which started three days ago (Selling NY buying London).