Coffee Futures Suffer Sharp Fall
Arabica coffee futures fell significantly on Thursday influenced by a substantial drop in Robusta prices in London. The drop accelerated after prices fell below the lows of the previous two sessions, attracting sales from speculators and triggering selling stop orders. The most active contract for July delivery at the ICE exchange in New York, closed 9.90 cents or 4.5% lower at 206.10 cents a pound. The volume increased reaching 57,435 lots. Likewise, the volume of switches was high in 14,154. The fall impacted the nearby July/September switch which lost 20 points ending at 1.75 cents and the forward curve which lost backwardation but remains inverted. Players have been adding shorts as the market failed to recover. The open interest increased 2,319 lots as of yesterday. The continue sell-off of the cocoa market added bearishness to the soft complex. Cocoa prices have lost 29.99% or $3,241 to $7,563 so far this week. The dollar retreated as focus returned to chances of interest rates to be cut or staying higher for longer time. Cert stocks increased 14,660 bags to 682,036 bags. Pending grading decreased 21,305 bags to 58,715. Today a total of 21,580 were graded, 14,735 bags passed and 6,845 failed.
Robusta Jul24 contract settled at $3,680 with a 3999/3620 range. No other way to describe todays activity other than a total collapse, $379 range. A move like this outside of weather markets is unheard of. Essentially the hedge lifting stopped and the recent roaster interest had eased which forced the speculative community to liquidate into a total vacuum. Sporadic commercial buying was defiantly noted but due to the fact there was very little ‘’resting’’ bids there was nothing there to absorb the relentless speculative bailout. Volumes were good for Robusta with over 25k lots trading on the July contract alone. Nearby structure weakened a touch seeing a 56/70 range on nearly 7k lots. Robusta Jul24 3500 puts vs 3780Δ25 traded 1000x @ 75, Robusta Nov24 3500/3000 putspread traded 750x @ 220, Robusta Jul24 4000 calls vs 3800Δ35 traded 750x @ 132.
At the time of writing
USDBRL 5.1115 -0.02%
USDCOP 3899.0 -0.02%
Miami London Brazil
305-925-4847 +44-203-580-6099 +55-11-3509-5426
ICE Arabica
Volume:
57,435
ICE Robusta
Volume:
39,572
Brazil Arabica
Volume:
700
Arabica-Brazil Arbitrage
Arabica-Robusta Arbitrage
Arabica Switches
Robusta Switches
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