Wednesday, December 27, 2023.

Arabica coffee futures for March delivery settled 340 points or 1.75 % higher at 197.75 cents a pound. Activity increased  as volume reached 35,500 lots including 7,618 switches.  A strong technical performance encouraged speculative buying since the opening. As we mentioned yesterday, breaking of the resistance level at 195 for the March position made participants to eye a price objective at 203.90, the high of last week. The active March / May switch remained firm attracting specs to increase positions. In relation to the weather, an area of low pressure will approach the south of Brazil bringing heavy rains and strong rains and also will cause significant precipitations in ES, MG and Alta Mogiana between Dec 31 and January 4th. Cert stocks decreased by 971 bags to 247,912 bags. Pending grading fell by 7,572 bags to 22,671. A total of 7,572 bags were graded. 4,010 passed and 3,562  failed.
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Robusta Mar24 contract settled at $2869 +32 with a 2885/2829 range The Robusta terminal continues to operate amid more comfort to the upside as natural sellers are side-lined. This encourages the speculative community to open positions with purchases which they know generates intraday momentum, which naturally attracts the systematic flows to follow the move. However, structure is telling a different story with March24/May24 driving lower touching $55 premium following values reaching $100 premium before the holidays. Most will assign this to normalisation following the explosion in Jan23/March24 before first notice day. Technically the upside trend remains intact and would hold longs into positions for now. If the market is unable to challenge above $3000 basis Mar24 through the remainder of 2023, we are likely to see a technical selloff into year-end due to declining trend strength.