Arabica Futures Consolidate Lower CoffeeNetwork - Arabica prices on the InterContinental Exchange were trading 0.95 lower for the March contract, last seen at 191.30. Volume was good with 9,868 contracts at the time of writing. The May contract is also trading 1.30 lower at 186.25 with 8,882 contracts.
Arabica futures are consolidating lower today. The market saw some early selling, and then bounced from the support level at 188.50. Traders note that currently, the oscillators are accompanying the action, but they could be overbought in the next session. Origin selling began to be more noticeable- due to both differentials and also seasonal selling ahead of the delivery period for the March contract. Despite today’s losses, the market is being helped by the structure. The H/K switch is firm, gaining a 10 premium. The K/N gained a 50 point premium, trading at +130. The market inverted for the second position, which may be an early indication that the shortage of supplies could extend. Yesterday, 89% of the coffees presented for grading to the exchange failed. As previously noted by CoffeeNetwork, ICE “can’t comment on why specific lots failed,” they did clarify to CoffeeNetwork in an interview that the prohibition on submitting previously certified lots prevents such lots from getting to the “pending grading” status - so that is not a criteria on which a lot could fail grading. “Lots can only fail on one or more of the grading qualifications - ie, quality.” From Brazil, there have been reports that farms are seeing good foliage, but low cherry counts. Updated reports should circulate soon.
Robusta futures are lower today as the market continues to correct from highs posted earlier in the week. There has also been some selling from producers ahead of the Tet holiday, which begins next month.
Commodities are mixed today. The number of Americans filing for unemployment benefits fell by 16,000 to 187,000 on the week ending January 18th, the least since September 2022.
Brent Crude Oil rose 0.15% to 78.00 and Spot Gold Futures also gained 0.34% to 2,013.09.
The Dow Jones Industrial Average ticked 0.29% lower to 37,159.23 and the Stoxx Europe 600 Index was last seen at 469.88, up 0.54%.
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