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Daily Coffee Report - 11/17/2023

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Coffee Extends Fall
 
StoneX Coffee Team
 

Arabica coffee futures extended decline as speculators continued to liquidate positions ahead of the FND next Tuesday Nov 21st. Rain forecasts for the producing regions of Brazil induced sales, while weak technical performance triggered sales of programs and algorithms. The contract with the highest activity for March delivery closed with losses of 455 points or 2.5% at 166.65 cents per pound. Weather forecasts in Brazil show rains spreading across the region next week, although some models indicate that the coffee-growing regions east and northwest of Minas, ES and Bahia could end the month with some hydric deficit. Regarding technical behavior, the breaking of the lows of the last two weeks attracted spec liquidations of longs positions. Open interest fell by 4,921 lots, evidencing the large liquidations of the previous session. The dollar softened a bit, while the currencies of Brazil and Colombia were mixed. Cert stocks were unchanged at 289,699 bags. Additional 7,125 bags (Papua New Guinea and Tanzania) were added to the pending grading for a total of 14,675 bags.  The New York market will be closed next Thursday in observance of the Thanksgiving Day holiday.

Robusta Jan24 contract settled -45 at $2521 with a 2582/2498 range. Market failed to find support as Arabica slipped lower. Previously we have seen some speculative Arb selling which has lent some support to Robusta, but this was not the case today. Commercial selling was present but also much less than seen during the week. Outright volumes remain weak with on 9k lots trading on Jan24. Structure remained fairly unchanged with Jan/Mar seeing a 70/94 range on 3.8k lots. Robusta Jan24/Mar24 20 put traded 1350x @ 8, Robusta May24 2600/2250 fence (to the call) vs 2425Δ64 traded 500x @ 9.

At the time of writing

USDBRL 4.8900 + 0.53%

USDCOP 4089.3 +0.08%

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ICE Arabica

Volume:

45,557

ICE Robusta

Volume:

21,497

Brazil Arabica

Volume:

823

Arabica-Brazil Arbitrage
Arabica-Robusta Arbitrage
Arabica Switches
Robusta Switches
 
 
Related tags: Coffee

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