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Daily Coffee Report - 05/16/2024

By: StoneX Coffee Team, Softs Coffee Miami

Coffee Markets Close Mixed

 

Arabica futures ended lower today in a quiet session, following a similar pattern as the previous session. The most active contract for July delivery settled 150 points lower at 197.90 cents a pound. Volume reached only 25,460 including 7,176 switches. Prices consolidated today inside the previous session’s range reflecting a decrease of the volatility. Technical indicators are neutral to slightly constructive as the RSI approaches near oversold conditions. Open interest decreased 2,037 lots, evidencing long liquidation as players show disappointment during yesterday’s performance. Fundamentally, harvesting is underway in Brazil, which could lead to some revised forecasts or further analysis of the 2024-2025 crop, but for the most part, this has already been factored into prices. The beginning of the winter season in Brazil and frost threats will bring volatility to the market. The transition from ENSO neutral to La Nina will also be a factor- right now, La Nina is expected to be mild, and have little impact on global coffee production, however, if this shifts to a more intense La Nina, we could see adverse weather patterns. ICE has also issued an amendment to their contract rules in order to adhere to the new EU deforestation regulation. This is an attempt to more seamless integrate the new regulation into the coffee sector and provide further clarity and transparency for the players involved. Certified stocks increased 9,429 bags to 749,878 bags. Pending grading decreased 12,259 bags. Grading summary on Thursday: 23,279 total bags graded, 18,539 passed (16,064 BR, 2,475 HN), and 4,740 failed (4.465 BR, 275 HN).

Robusta July contract settled at $3420 +18 with a 3425/3381 range. Market continues to track sideways with no fresh news. Commercial activity remains light with the general theme being thin layers of buying scale down, roasters picking up cover as and when the market dips lower. Virtually zero origin selling of note. Structure is weakening very gradually with a tiny range seen today, 61/67 on the July/Sep 2.7k lots. This rhetoric is reflected in the poor outright volumes also. Robusta Jul24 5000 call traded 2000x @ 2, Robusta Sell Jul24 3600 calls - Buy Jul24 3900 calls - Buy Jul24 3400 puts - Sell Jul24 3200 puts - Buy Δ40 Jul24 3400 traded 2000x @ 36, Robusta Sep24 3500 calls vs 3340Δ44 traded 1100x @ 186.

At the time of writing

USDBRL 5.1307 -0.12%

USDCOP 3828.2 +0.13%

Coffeeorderdesk@stonex.com    

Miami                                                London                                Brazil                           

305-925-4847                                  +44-203-580-6099            +55-11-3509-5426     

ICE Arabica

Volume:

25,460

 

ICE Robusta

Volume:

17,674

 

Brazil Arabica

Volume:

142

Arabica-Brazil Arbitrage

Arabica-Robusta Arbitrage

Arabica Switches

Robusta Switches

  • Coffee

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