Coffee Mar '19 (KCH19)
Coffee Futures Market News and Commentary
September arabica coffee (KCU26) on Thursday closed down -14.15 (-4.33%), and September ICE robusta coffee (RMU26) closed down -114 (-2.91%).
Coffee prices settled sharply lower on Thursday, with arabica sliding to a 1-week low. Strength in Brazil’s coffee exports weighed on prices on Thursday after Cecafe reported that Brazil’s Jun green coffee exports jumped +14.4% y/y to 2.64 million bags.Â
Since posting 5.5-month highs last week, coffee prices have whipsawed in a wide range below those highs amid illiquid trading conditions, leading to volatile price moves. Price volatility in coffee markets is exacerbated by illiquid trading conditions. After Intercontinental Exchange (ICE) raised margin requirements for coffee futures trading twice last week, liquidity has dried up, prompting many commodity funds to close their positions and leading to excessive one-way price moves.Â
An excessively long position in ICE robusta coffee by funds can exacerbate any price downtu... Read more
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