Coffee surges on ICE with drop in certified stocks

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   Porto Alegre, February 10th, 2022 – Coffee beats the dense 250-cent resistance and gains bullish technical strength on ICE US. The May/22 position changed its performance level again and now has the challenge of beating the level of 260 cents. The accelerated fall in certified coffee stocks on the NY exchange boosted the buying wave of funds and speculators. The low volume reinforces the concern about supply and the fear of squeeze, boosting the high prices of arabica coffee in NY. The rollover movement of the Mar/22 position and the expiration of Mar/22 options this Thursday (10th) reinforce the bullish financial dynamics.

    The tension caused by the fall in certified stocks usually has a short-term effect on the market. Its importance and intensity were reflected in the rally of this Wednesday (09), with the second position on ICE US reaching the highest level in 10 years. Another point is that the frequency of these movements has increased in recent years. In any case, it is worth noting that the longer positions on ICE US, particularly expiring from 2023, did not rise at the same rate as the shorter contracts. This indicates that the transmission of the bullish movement is losing strength over time. And this reinforces the short-term reading of the movement. The slope of a longer price curve is still closely linked to impressions around Brazil’s 2022 crop and the effects of the settlement of global markets from the monetary normalization in the United States, with cuts in stimulus and highs in interest rates.