Coffee Mar '20 (KCH20)
Coffee Futures Market News and Commentary
September arabica coffee (KCU26) on Wednesday closed up +0.65 (+0.20%), and September ICE robusta coffee (RMU26) closed up +62 (+1.61%).
Coffee prices settled higher on Wednesday amid a stronger Brazilian real (^USDBRL). The real climbed to a 4-week high against the dollar on Wednesday, discouraging export sales from Brazil’s coffee producers.
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 downturn. Last Friday’s weekly Commitment of Traders (C... Read more
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