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Posted by Tango
on February 4, 2019, 7:22 am
Robusta opened with selling that attracted good buying and the market has maintained its steady tone. The arb is 31.81 after closing at 32.44. KC has attempted to replicate RC but with less success. Since the morning’s highs the market has drifted to unchanged. The March depth of market is balanced and light on both sides. In the forwards buying is present but scattered for a couple of cents and extending to Jul20. Spreads are quiet in both markets but steady in RC. It is uncertain what 8:00 will bring. Fund buying may emerge but longs will be ready to check any strength as we saw on Friday. The $ is steady today against all major currencies and against all emerging markets. USDMXN is 19.1567 +.0627, USDCOP is 3089.48 +1.58 and USDBRL 3.6801 +.0205 +.056%. All markets are quiet and are trading either side of unchanged. Gold is steeply lower compared to other markets due to the steady $. Cocoa is higher while cotton and sugar are lower.
Our market remains within the range that we have seen for some time. Option expiration is on Friday with a large option OI both in outrights and spreads. Together with expiration is the beginning of the roll. The March OI is 117,473 with fund shorts needing to roll forward while the March contract is subject to delivery changed which some have prepared for. Both markets are presently drifting lower.