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Arabica Futures Rise Amid High Speculation

By: Diana Delgado, Contractor

Arabica Futures Rise Amid High Speculation

 
Diana Delgado
Latin American correspondent
diana.delgado@stonex.com

Arabica Futures Rise Amid High Speculation

Arabica prices on the InterContinental Exchange were trading higher by 0.55 for the May contract, last seen at 186.80 recovering from earlier losses in a market with high volatility as the First Notice Day begins today.

Volume is low with 12,300 contracts traded so far, a typical reaction on the First Notice day. The May contract traded as high as 188.85 and as low as 185.55.

The active March /May switch traded with a high volatility up to 10.40 cents with little volume (210 lots) due to short coverage in the last minute. Right now, it is negotiating at 10.00. it has ranged from 8.80 to 10.40 cents.

The switch May/July has also traded between a range of 1.40 to 1.60. ”We have also had a lot of volatility with these switches,” said a coffee trader.

The First Notice Day began today and ends on 18 March. During this period, market participants can deliver coffee.

Open interest shows that there are only 2,104 open lots left versus March.

A total of 185 delivery notices were issued for March, which is equivalent to approximately 46,250 bags.

StoneX yesterday released its Brazilian crop estimate for 2024/25. Brazilian coffee production was estimated at 67 million bags, indicating a 4.2% increase. Arabica coffee production was estimated at 44.3 million bags, an increase of 3.6%, and the production of Robusta coffee was at 22.7 million bags, an increase of 5.5%. The prediction is in line with other estimates from Volcafe.

In Colombia, coffee production is set to increase to 5.8 million bags in the first half of this year, the general manager of the coffee growers federation German Bahamon said.

Output will represent an increase of 15.5% from the 5.020 million bags in the same period last year, according to figures from the coffee growers federation.

Robusta futures are also high higher.  The May contract is trading $27 tonne lower at $3,173 per tonne. The May contract traded as high as $3,178 and as low as $3,140.

Other soft commodities such as cocoa touches a new record high.

Brent Crude Oil increases after falling slightly yesterday. The Brent trades to $82.66, up 0.32 points.

The Dow Jones Industrial Average falls in today's session at 38,563.80 points,  down 64.19 points.

The Brazilians Real weakens slightly from the opening of the session trading at 4.93604. The Colombian peso also weakens to COP3,920.

By Diana Delgado

  • Coffee

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