Risk aversion increased after the Fed – US raised interest rates by 0.75%, spurred Wall Street speculation to shift capital flows, causing the dollar value to drop sharply, and also an opportunity for Funds and speculators to turn around. to the coffee derivatives markets to buy into…
Robusta chart London January 2023 week 44 (from October 31, 2022 to November 5, 2022)
For the whole week of 44, the London market had 3 increasing sessions and 2 decreasing sessions. The price of Robusta coffee for January delivery increased by all 20 USD, or 1.08%, to 1,869 USD/ton and for March delivery increased by all 13 USD, or 0.71%, to 1,850 USD. /ton, slight increases. Trading volume above average.
Similarly, the New York market also had 3 increasing sessions and 2 decreasing sessions. The price of Arabica coffee for December delivery increased by all 5.95 cents, or 3.50 percent, to 175.75 cents/lb, and for March delivery, it increased by all 3.90 cents, ie. up 2.32%, to 171.65 cents/lb, significant increases. Trading volume remained very high above average.
The price of green coffee beans in the Central Highlands market increased by 400-500 dong, up to range in the range of 41,200-41,700 dong/kg.
The highlight of the week was the decision to raise the USD operating interest rate by 0.75% to 3.75 – 4%/year by the Federal Open Market Committee (FOMC), also known as the Fed – US, including when it is recognized that tightening monetary policy will contribute to economic recession and may contribute to pushing inflation higher. The Fed Chairman said that only consider interest rates when the US economy has a clear positive change. It is likely that the Fed will raise interest rates by 0.5% at the year-end meeting and also do not rule out that it will surpass the expected level of 4.75%/year.
High risk aversion caused Wall Street speculators to rush to withdraw capital from the markets in general, causing the USD value to fluctuate quite strongly in the past week, but it is also an opportunity for Funds and speculators on foreign exchange markets. The coffee derivatives market is back to buying.
Weather information in the main coffee growing regions in the south of Brazil has recently had very favorable rain, good support for coffee trees to make new crops, promising that the 2023 crop will be a record crop, combined with with the harvest of the new crop for coffee year 2022/2023 underway in the main producing countries continuing to weigh on the markets. Meanwhile, demand for sales of Brazil’s freshly harvested crop is currently putting significant pressure on the futures markets.
As of Monday, October 31, the inventory of Robusta coffee certified and monitored by the London floor has increased by 1,430 tons, or 1.61% from a week earlier, to 90,230 tons registered at 90,230 tons. (equivalent to 1,503,833 bags, 60 kg bags).
English (giacaphe.com)
