Arabica coffee futures settled higher on Monday supported by the Robusta market and the constructive technical outlook. The active July contract finished 3.50 cents higher at 227.50 cents a pound. Despite some rains in Vietnam, reservoirs used to irrigate crops in Central highlands are critically low and rains should develop before May 15 to avoid irreversible damages to the crops. Activity was light reflecting the absence of commercial activity. The volume reached 29,750 lots including 6,969 switches. Technically, a double bottom formation tested on Friday, and the breach of the short-term down trend could indicate a possible return to the recent highs. Commodity prices declined today. Cocoa suffered another blow as prices fell 14% to end at $9,150 per ton. Certified stocks increased 4,695 bags to 661,352 bags. Pending grading also increased by 4,515 bags to a new total of 60,719. Today a total of 4,820 bags were graded (3,995 BR, 825 HN), all of them passed. No bags failed grading. Robusta Jul24 contract settled at $4164 with a 4239/4137 range. Market continues to operate at the lower end of the recent range with very little commercial interest. Sporadic roaster buying was seen scale down. Despite the softer market talk continues to circulate about issues in Vietnam and production / output which is providing support to flat price. Jul/Sep saw a 72/95 range on only 1.8k lots. Robusta Jul24 4000/3600 putspread vs sell 5000 call vs buy 4200Δ36 traded 1500x @ 58, Robusta Sep24 2800 puts vs 4105Δ3 traded 1000x @ 12, Robusta Sep24 3500 puts vs 4105Δ20 traded 1000x @ 101.
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Arabica coffee futures settled lower Friday but recovering partially from early heavy losses. The market was under pressure on spec selling that extended from last night following the announcement of an increase of initial margins in London. In addition, reports of rains in the Dahlak region of Vietnam added weight on the Robusta prices. The most active “C” contract for July delivery at the ICE exchange in New York ended 4.10 cents or 1.78 % lower at 224.00 cents a pound. Volume reached 37.014 lots including 10,350 switches. Dollar strengthened today after US inflation data for March reinforced perception the Federal Reserve will delay interest rate cuts. During the week, Arabica lost 3.38% or 7.85 cents. Profit taking and technical driven selling contributed to the down move at the same time as the recent commercial buying eased. The volatility declined after the FND on Monday. Cert stocks were down 4,835 bags to 656,657 bags. Pending grading added 5,230 bags to 56,204 bags. No grading on Friday.
COT (CIT) Non-commercials decreased their long position by 3,666 lots to 69,040lots long and decreased their short position by 938 lots to 18,335 lots short, with a net long position of 50,705 lots in the week to April 23rd. The London terminal finally gives some ground ending the session over 3% lower as the recent roaster fixations and hedge lifting slows. The contract for July delivery closed at $4151 -153, trading in a range of 4132/4303. Without these buying elements upside momentum stalled and encouraged the systematic players to shift from long to short, which drove values into a vacuum triggering stop below the previous low. Whilst most participants would not turn bearish after a one-day event, the nearby technical outlook would favour a retest of the old congestion area resting marginally above $4000 basis July24. |
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